Equity markets and IPO deals are recovering, while the pain from its currency peg to the dollar dwindles. Still, the city waits for the all-clear to sound. 

What a difference a few weeks and one very large mainland stimulus program makes to the fortunes of Hong Kong. The Hang Seng index is up almost 30 percent, and the poster child of financial center success, IPO deals, have even returned, as finews.asia reported Thursday.

Moreover, even though the city’s currency peg to the dollar has survived another cycle to see another day, something we questioned heavily in recent years, the Federal Reserve’s recent downward pivot on rates will stop the US from raining quite as much on the local economy’s parade.

Fourth Worldwide

The good news doesn’t stop there. As finews.asia reported at the end of September, an index created by the China Development Institute and Z/Yen Partners, the Global Financial Centers Index» (GFCI), showed that Hong Kong had again surpassed Singapore as the top regional financial center, moving back to third in the global standings behind New York and London.

Even the local Mandatory Provident fund, or the local government-regulated employee retirement plan, gave all residents something to cheer about. After years of losses and negative returns, it is up 12.77 percent year-to-date, according to MPF Ratings, an independent agency.

No More Air Balls

To wit, this is all a long cry from January, when we were reporting on the dunking that the Hang Seng and China equity markets were getting at the time, with the latter index off more than half of its all-time high.

Still, even though there is reason for optimism, the pandemic and the post-pandemic era have left their traces. Office vacancies are at a record, the domestic property market is in the doldrums - and you still have the great big specter of US-China geopolitics that could flare up at any time, particularly in an American presidential election year.

Less Ebullient

That is probably why city chief executive John Lee was effusive, but not ebullient, about matters at a flag-raising event on Monday marking the 75th anniversary of the founding of the People’s Republic of China.

In a press release, he maintained that the city is «in a critical period of transformation». «We must adapt to our circumstances, continuously reform, recognize and seek change, break through bottlenecks, address shortcomings, remove obstacles while consolidating and enhancing Hong Kong's advantages,» he stated.

Enter the Dragon

Everything considered, this is a remarkable turnaround from the start of the year when most indicators seem to hint at a period of prolonged difficulties for the city.

Moreover, many of us have forgotten we are only halfway through what is shaping up to be a very propitious Year of the Dragon. And right now, it looks like many of us were mistaken in not putting more of our trust in the Chinese Zodiac.