Fed Unwinding of QE Has Limited Hong Kong Impact, JPMorgan Says

A gradual increase in U.S. interest rates will have limited impact on Hong Kong equities because benefits from a stronger economy will outweigh the negatives, according to JPMorgan Asset Management Ltd.

The Federal Reserve may slow its asset purchases in the second half of this year if the U.S. labor market continues to improve, and may start raising interest rates from mid- to late 2014, said Tai Hui, Hong Kong-based chief market strategist for Asia at JPMorgan Asset Management, which oversees about $1.5 trillion globally. A liquidity withdrawal caused by U.S. interest-rate hikes will have little impact on the city’s equity market because most of the fund flows associated with quantitative easing have been into fixed income, he said.