What I meant is that hsi p/e is about 12 while SPX is 19, a world of difference. Dollar denominated bonds yield is higher given the same credit rating.
I'm with IB. I'm exp with trading equities/options but not bonds - help
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What I meant is that hsi p/e is about 12 while SPX is 19, a world of difference. Dollar denominated bonds yield is higher given the same credit rating.
How can this be when the hkd is solidly pegged to the USD? HKMA offers the exact same rates than Fed, otherwise the peg would not hold. This factors, risk adjusted into identical yields.
It is not the same, there is sovereignty risk at mininium. Even HK only has AA- from Fitch now. For non-peg countries, it is even higher yield.
I know because I used to work at Fitch.
you should be clam and compare apple with apple.
Find the largest HK company debt issues and compare the largest and/or comparable US company debt issues, you will see the yield difference. They are rated by 3 firms equally.
as much as you think HK can peg both the interest rate and currency rate the same, there were time not long ago during the riot when HKD is under duress. What if HK is not allowed to buy USD? Just saying. Now it is not normal time.
You are conflating issues. If there was a higher sovereign risk then the government bonds would trading at a higher yield which they don't (in HK, which we talked about). You can look up CDS rates. US 5yr trade at 27 and HK at 36 implying only a 0.15% higher probability of default which is negligible for purposes of our discussion.
Regarding corporate bonds my point was that EM bonds already trade at much higher yields (lower prices) and are a much better value proposition versus US corporate bonds going forward across the same risk buckets. The reason is macro flows out of EMs over the past year and repatriation into USD by foreign investors and higher cost to service USD denominated EM debt.
Regarding corporate bonds my point was that EM bonds already trade at much higher yields (lower prices) and are a much better value proposition versus US corporate bonds going forward across the same risk buckets. The reason is macro flows out of EMs over the past year and repatriation into USD by foreign investors and higher cost to service USD denominated EM debt.
You can pull out any OC, copy and paste the same paragraph and be done with. This is from AIA 2022 OC. Don’t confuse mechanical peg vs sovereign. In face, Hong Kong Dollar is not a sovereign currency. It can easily peg to RMB as well, the last sentence sums it all.
CDS does make sensible calculation on current situation. HK has no default risk in its currency and/or government debt obligations, perceived by the market.
If you are a big whale, go shop distressed assets in Sri Lanka now with your USD/CAD money, will go far.
Hong Kong Dollar Exchange Rates
The Hong Kong dollar is freely convertible into the U.S. dollar. Since 1983, the Hong Kong dollar has been linked to the U.S. dollar at the rate of HK$7.80 to US$1.00. In 2005, the Hong Kong Monetary Authority (the “HKMA”) broadened the link from the original rate of HK$7.80 per US$1.00 to a rate range of HK$7.75 to HK$7.85 per US$1.00. The Basic Law of Hong Kong (the “Basic Law”), which came into effect on 1 July 1997, provides that no foreign exchange control policies shall be applied in Hong Kong.
The market exchange rate of the Hong Kong dollar against the U.S. dollar continues to be determined by the forces of supply and demand in the foreign exchange market. However, against the background of the fixed rate system which applies to the issuance and withdrawal of Hong Kong currency in circulation, the market exchange rate has not deviated significantly from the level of HK$7.80 to US$1.00. The Hong Kong SAR government has indicated its intention to maintain the link at that rate. Under the Basic Law, the Hong Kong dollar will continue to circulate and remain freely convertible. The Hong Kong SAR government has also stated that it has no intention of imposing exchange controls in Hong Kong and that the Hong Kong dollar will remain freely convertible into other currencies, including the U.S. dollar. However, we cannot assure you that the Hong Kong SAR government will maintain the link at HK$7.80 to US$1.00 or at all.
Not sure what AIA OC stands for. Nor have I copy pasted anything, but thanks for the compliments.
By the way are you the same guy who was dabbling in cryptos in HK a while back with a need for a government subsedized office space? I remember to have heard about a guy of the same name.
All else you wrote is idiotic and does not even touch on the topic we talked about. You claimed HK and the US are rated different sovereign risk, if that was the case their CDS premia would be very different. By the way, you are hopefully aware that you are making my point the entire time re corporate bonds. EM corp bond yields are higher which results in lower prices, countless EM corp bond etfs sold off almost 50% since the end of 2021. US corp bonds on a similar rating level are far away from that.
One does not have to be a big whale to invest in EM bonds and equities. This topic is clearly way over your head. I bow out, waste of time.
By the way are you the same guy who was dabbling in cryptos in HK a while back with a need for a government subsedized office space? I remember to have heard about a guy of the same name.
All else you wrote is idiotic and does not even touch on the topic we talked about. You claimed HK and the US are rated different sovereign risk, if that was the case their CDS premia would be very different. By the way, you are hopefully aware that you are making my point the entire time re corporate bonds. EM corp bond yields are higher which results in lower prices, countless EM corp bond etfs sold off almost 50% since the end of 2021. US corp bonds on a similar rating level are far away from that.
One does not have to be a big whale to invest in EM bonds and equities. This topic is clearly way over your head. I bow out, waste of time.
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AIA Group is the largest company in Hong Kong stock exchange. OC is short for offering circular for new security listing, in this case, it was their 16 billion USD debt offering last summer.
When you talk about CDS comps, seems you know what you are talking about. But no, you don't.
Wrong person, I don't do cryptos, haven't been to China or HK almost 7 years no, how fast the time passes.