Hong Kong: HANG SENG INDEX (.HSI) economy is now in extremely difficult times

Hong Kong: HANG SENG INDEX (.HSI) economy is now in extremely difficult times

Hong Kong: HANG SENG INDEX (.HSI) economy is now in extremely difficult times

Hong Kong is set to record its first budget deficit in 15 years, the city’s finance chief warned Monday, as the business hub reels from the twin shocks of the trade war and seething democracy protests.

In the latest grim assessment for the city, financial secretary Paul Chan told lawmakers that the economy was set to contract 1.3 percent in 2019 hitting the city’s usually bulging coffers.

Chan blamed the 2019-2020 deficit on decreased tax revenues, a slowdown in land sales and recent economic sweeteners he unveiled in a bid to win over the public during a tumultuous year of unrest.

“At the end of the financial year, the SAR government will be in the red,” Chan said, using an abbreviation for the Hong Kong government.

“Hong Kong’s economy is now in extremely difficult times,” he added, as he called for political violence to cease.

The city has been battered by nearly six months of protests triggered by rising public anger over China’s rule and the police’s response to protests.

Crowds are pushing for greater democratic freedoms and police accountability but the city’s pro-Beijing leadership has refused any major political concessions.

The increasingly violent rallies have hammered the retail and tourism sectors, with mainland Chinese visitors abandoning the city in droves.

Figures released last week showed mainland arrivals fell a record 46 percent in October, a usually crucial holiday period in China known as “Golden Week”.

But the economy has also taken a pumelling from the US-China trade war in a city that serves as a crucial link between the authoritarian mainland and the global markets.

The last time Hong Kong recorded a budget deficit was in the aftermath of a deadly 2003 outbreak of the Sars virus that killed some 300 people.

The city’s budget usually ends the year in an enviable position and successive fat years have built up an impressive cushion.

In March the government said its reserves stood at HK$1,170 trillion ($150 billion) with some critics saying successive leaders have not done enough to alleviate endemic inequality.

Confirmation of a deficit will do little to restore business faith in the hub given Beijing is offering no political solution to the crisis.

On Monday, the city’s aviation regulator gave Hong Kong Airlines five days to find fresh revenue streams or risk seeing its license suspended.

The carrier, which is owned by the struggling mainland conglomerate HNA Group, has been one of the most high profile casualties of plunging visitor numbers and announced last week it was delaying salaries to some staff.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 27,204.66.

The projected lower bound is: 25,673.45.

The projected closing price is: 26,439.05.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 22.3275. This is not an overbought or oversold reading. The last signal was a buy 9 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.27. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 16 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -71. This is not a topping or bottoming area. The last signal was a buy 10 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

Rex Takasugi – TD Profile

HANG SENG INDEX closed up 93.150 at 26,439.641. Volume was 36% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
26,475.34026,511.55126,393.09026,439.6411,043,475,328
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 26,758.62 26,631.88 27,685.50
Volatility: 21 18 19
Volume: 1,478,290,688 1,512,939,008 1,754,927,616

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

HANG SENG INDEX is currently 4.5% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .HSI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .HSI and have had this outlook for the last 7 periods.

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