Yuan depreciation, US rate hike seen hurting appeal of HK stocks

Hong Kong

HONG KONG investors who sought shelter from China's rout in local shares say the clock is running out on that trade.

While a gauge of Hong Kong stocks has fallen since the end of April, the decline is less than half that of a measure of Chinese shares listed in the city. Hong Kong's currency peg to the US dollar means the expected rate increase by the Federal Reserve will weigh on the city's developers, says HSBC Holdings plc. Morgan Stanley says yuan depreciation will hurt retailers.