Chan warns of efforts to rattle HK amid law push

Financial Secretary Paul Chan Mo-po warns that foreign funds may try to rattle Hong Kong's market and make it look like "fish in troubled waters" amid the looming anti-sanctions law.

Analysts said although there are fears the new law would drive away foreign capital, they expect it would have little impact on the market.

Chan, on his blog, said some people may try to take advantage of foreign criticism of the new law to try to weaken Hong Kong's stature as an international financial center and discredit the city's business environment and even cause market fluctuations that he likened to "fish in troubled waters."

He said Hong Kong must remain vigilant, prepared and pay more attention to managing risks.

Chan said it is Hong Kong's responsibility to introduce the law in the city, days after Chief Executive Carrie Lam Cheng Yuet-ngor said she supports the implementation of a mainland law to respond to foreign sanctions.

Kenny Wen-kit, wealth management strategist at Everbright Sun Hung Kai, said he expects the new law to have little effect on Hong Kong's capital market.

He said the focus of investors is mainly on the laws and regulations concerning mainland enterprises, such as the recent anti-trust regulations, instead of Hong Kong's laws.

At the current stage, Wen said he does not see foreign capital moving out of Hong Kong, adding that making profits is the most important part for foreign capital to run businesses in the city. And, he added, even if foreign capital retreats from Hong Kong, Chinese capital is expected to fill in the gap.

On top of that, China's regulatory changes are not news to the market, he said, adding that those who want to leave should have left before the imposition of the national security law or during the unrest in 2019.

Wen said the market is more prudent about the outlook of Chinese stocks due to Beijing's continuous regulatory measures - and "there sure are some short-sellers trying to make a profit" - but the impact is estimated to be limited.

Chan said the jobless rate is expected to drop further from the current 5.5 percent as private consumption spending picks up.

Gross domestic product for the second quarter increased by 7.6 percent year on year.

Hong Kong is also lifting its economic growth projection to between 5.5 percent and 6.5 percent, said Chan. It was previously between 3.5 percent and 5.5 percent

victor.zhong@singtaonewscorp.com