DevDosh Ltd want to help all investors no matter where they are located. It is on this basis that our attention was drawn to our investing brothers and sister in Hong Kong (HK) recently.
Hong Kong and the UK have both been through tough times recently. Brexiteers and freedom fighters could say that the UK are just breaking away from tyranny as Hong Kong are being enveloped by it.
However our shared pain could be just the opportunity Hong Kong investors are looking for to protect and grow their capital. Hong Kong’s current inflation rate is 3% and their interest rate is 2% so cash is undoubtedly trash. For those with an analytical bent the Hang Seng has attractive resistance lines but the landscape it is performing in does not have a certain future.
The shadow of July 1st 2047 is looming large. The protesters which have been pushing the mighty red beast back since June 2019 are fighting an uphill battle. China is a behmoth of a country and unless it changes course is clearly looking to swallow Hong Kong up, at least partially, when the One Country Two Systems principle expires.
The UK on the other hand is just emerging from a 27 countries one system approach and things are looking a lot brighter for us than for Hong Kong.
GDP
HK has declined for 5 quarters and is currently at -2.9% QYoY
UK has declined for 3 quarters and is currently at +1.1 QYoY
Not impressive by itself until you take into account that the UK has out performed Europe and Hong Kong has woefully underperformed in comparison to Asia.
Unemployment
HK’s unemployment rate has increased steadily for the last 3 quarters
UK’s unemployment rate has remained the same for the last 3 quarters
Business Confidence
HK’s business confidence index has been dropping for the last 5 quarters and sits at -22
UK’s business confidence index has finally turned a corner after dropping for 7 quarters straight showing an up-tick to +23
Currency
HKD$ is pegged to the USD$ at a rate of HKD$ 7.75-7.85 per USD$ 1.00
GBP is at its lowest rate to the USD$ since the summer of ‘85. USD$ 1.00 will currently buy you GBP£ 1.30 of UK currency.
What this goes some way to showing is that the UK is finally emerging from a suppressive situation while Hong Kong is still in the grips of theirs. Furthermore the HK situation is getting worse while ours is getting better. Due to the HKD$ being pegged to the USD$ though their currency is reasonably strong (although that may change in the future). The GBP£ on the other hand is being traded weakly due to Brexit sentiment.
DevDosh Ltd : Window of Opportunity
What we have now is a window of opportunity that can be exploited for the benefit of all parties. The investors of Hong Kong need to get their money offshore before China moves it’s control up a gear. The Chinese establishment has already built bridges connecting HK to the mainland, installed an immigration check point at Guangzhou and started a programme called the “Great Bay Area” to integrate HK’s economy into that of Southern China – it really is only a matter of time before the students lose and HK is assimilated.
Getting capital out of Hong Kong and into the UK is the smart play for investors right now. They will get a value uplift from the currency transaction as well as the return on their investment. The UK landscape is primed for growth and will benefit associated capital no matter where it hails from.
DevDosh Ltd welcomes all investors. As long as they want the safest 10% return in the current fixed income market, we are the investment partner for them.