September 23, 2019 / 11:06 AM / 22 days ago

Hong Kong investors switch to bonds from equities - Refinitiv Lipper data

Sept 23 (Reuters) - Hong Kong’s local investors are selling equities in favour of debt instruments this year, as concerns over political protests and U.S-China trade uncertainties weigh on sentiment.

Data from Refinitiv Lipper showed domestic investors sold $5.4 billion worth of equity funds in the first eight months of 2019, and they bought $4.9 billion in debt funds.

Debt funds offer better safety due to their stable returns and smaller fluctuations compared to equity funds, and are often preferred during difficult market conditions.

Hong Kong’s protests, started to oppose a proposed law that would allow extraditions to China, have rattled its stock markets in recent months, as have worries over the Sino-U.S. trade dispute.

Higher U.S. tariffs on Chinese goods are expected to hurt Hong Kong firms this year, as they play a major part of the supply chain to China’s exports.

At the end of August, Hong Kong equity funds’ assets under management (AUM) fell 10% to $81 billion, while bond funds’ AUM rose 4.7% to $22.1 billion, the data showed.

Reporting By Patturaja Murugaboopathy

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