Goldman Sachs put an underweight rate on HK firms

Goldman Sachs expects Hong Kong companies to underperform in Asia this year, citing the internal inflation due to the strong Hong Kong dollar and caution about the property market.

The US investment bank gives an “underweight” rating to MSCI Hong Kong Index and an earnings growth forecast of 5 percent this year, which is well below a 10 percent rise for China’s A shares and an 18 jump for Taiwan-listed companies.

Timothy Moe, chief Asia Pacific equity strategist at Goldman Sachs, said Hong Kong companies faces several challenges, including the local inflation due to Hong Kong dollar’s peg to US dollar.

Moe also said Goldman Sachs remains cautious about local developers, which have been under the pressure of low home prices and high financing costs in the past year.

(Themis Qi)