Headwinds still exist but aren’t worse, analysts say.
Analysts are in unison that Hong Kong has indeed stabilised, but it’s hardly a reason to get excited as the territory is only able to muddle through due to its pacified headwinds.
According to a report by UBS, headwinds for the territory are not reversing and turning into boons.
“These call into questions how far the ongoing improvement will go and how long it will last,” the report noted. “While the macro maybe getting less bad, which is comforting, we doubt there will be much recovery in store beyond the bottom.”
Meanwhile, the report added that over the next 4-6 quarters, an Lshaped path is the most likely trajectory for the city.
“Besides, concerns on rates and China are in our view only temporarily off the radar. They could potentially resurface in an abrupt fashion. What we went through in 1Q16 was already a distant memory, but that could happen again,” the report warned.
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