Good and Bad News for Hong Kong ETF

| About: iShares MSCI (EWH)
This article is now exclusive for PRO subscribers.

Around the world, economies are pulling themselves out of the gutter. But Hong Kong, and its related ETF, may find itself stuck without a strong helping hand. It’s not all doom and gloom, however.

On the minus side:

  • Hong Kong’s jobless rate increased 0.1% from May to reach 5.4% in June, which is making it harder for the government to revive growth, reports Sophie Leung for Bloomberg. The city has injected $11.3 billion, or 5.2% of GDP, to help the stumbling economy.
  • GDP diminished a seasonally adjusted 4.3% in the 1st quarter from the previous three months, and the final numbers for the second quarter may not be as severe as the 7.8% decline in the first quarter year-over-year.
  • Bankruptcy petitions in Hong Kong climbed 89% in June to 1,619 year-over-year.

But in better news:

  • Financial Secretary John Tsang says export demand is improving and that is what contributed to the smaller decline in the economy for the second quarter.
  • The Financial Secretary previously projected a 6.5% contraction for 2009 after a significant decrease in demand for Chinese goods shipped through the city.
  • Home sales also increased 19.3% this year.
  • iShares MSCI Hong Kong Index (NYSEARCA:EWH): up 42.3% year-to-date


Max Chen contributed to this article.