Thoughts & Observations from Hong Kong

I recently took a short trip to the Pearl of the Orient, checking out great food as well as the famous sights and of course, to assess the local economy.

Upon landing, I put up at Prudential Hotel at Jordan (佐敦), which is an extremely convenient place for a foreigner to live in as its situated strategically between the commercial districts and the heartland areas in Hong Kong. From this place, you could go almost anywhere in the eastern or western parts within 50 minutes!

Naturally, I had to go for some dim sum while in Hong Kong. While most people have heard of Tim Ho Wan, a colleague of mine told me of a relatively-unheard dim sum place by the name of ‘One Dim Sum‘ (一點心), located near Prince Edward MTR station. The walk from the metro station is about 5 minutes if you come out from the proper exit, and the place is easily identified by its long queue! There were many tourists (Brazilians, French, Koreans etc) like myself in the wait as well.

One Dim Sum

I waited close to 50 minutes before my family could get a table. There’re a couple of bars and cafes around the area, so technically you could get a queue number and chill somewhere else before digging into delicious dim sum.

When we finally got a table, we weren’t let down – the food was great! Prices were affordable by local standards, and its probably one of the best dim sum I’ve ever had in Asia. We had everything from the standard Har Gow, Xiu Mai, Char Siew Bao to Spring Rolls, Century Egg Porridges and Yam cakes! The food was generally very fresh and appetising! Here are some pics:

dim sum

har gow

yam cakeIts a great dim sum place that I would come back for more – and you should too!

Other than visiting the shops and markets at Mongkok and Sham Shui Po districts, I also headed down to the central business district on Hong Kong Island (for more shops and food). I managed to also drop by Cheung Kong Center – headquarters of the legendary tycoon Li Ka-Shing!

at Cheung Kong centerOk now on a serious note:

The local economy has been slowing down, and my associates in Hong Kong have communicated to me that everyone is feeling the slowdown from the mainland (China). External trade and merchandise exports are weak, and retail across the island is generally sluggish. Local sentiment is still quite negative on real estate prices, with Hong Kong still being one of the world’s costliest property markets in the world.

HK propertyHong Kong suffers from a similar issue that my home country of Singapore faces – an area perceived by the global investment community to safely ‘park money’. In the recent decade, the closed capital account of the mainland has created mal-investments and contributed to locals from the mainland putting money in assets in Hong Kong.

With the targeted launch of the Shenzhen-HK stock connect, more so-called ‘trapped capital’ would move out of the mainland via the initiative into Hong Kong. Whether this trend is sustainable or not is anyone’s guess.

HK construction

Construction activity in certain areas in the city is still active but momentum has slowed down.

Additionally, Hong Kong’s real estate market seems to be topping out for good. Year-to-date, both commercial and residential property have seen price increases after declining in 2015, probably due to a lower trajectory of US interest rate normalisation (coinciding with the broad-based weakness seen in the USD). With a slowing economy and with Asia seeing a rising NPL-cycle, it’s matter of time before real estate in Hong Kong gets pulled down.

With the probability of a correction in property prices, I’ll be searching for viable short opportunities among Hong Kong property-related assets. In the near term, risk-assets in Hong Kong can probably do well given the current market condition that we’re in.

P.S.: if you’re visiting Hong Kong, don’t forget to check out the Peak on HK Island! You could get there with a 10 mins walk from Central MTR. It has a breathtaking view of the Pearl of the Orient – overlooking onto Kowloon Bay!

the peak

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