Francis Ian Chua

The measures that China may take to contain the COVID-19 variant could disrupt global growth. Markets don’t seem to be pricing this in. Risk assets have been remarkably robust, with some equity markets touching new highs, even as the Delta variant of COVID-19 has spread worldwide. But we are increasingly anxious about the threat that Delta poses in China, which markets do not appear to be anticipating.

Markets are becoming increasingly optimistic about fiscal spending, but we are sceptical that this can continue indefinitely. The US midterm elections may draw out fiscal hawks. Part of the current market narrative is that record fiscal spending is becoming engrained in people’s expectations. It is a flirtation with Modern Monetary Theory, which broadly says governments can spend heavily as long as inflation remains contained.

I believe most of us miss Hong Kong. Some of our lady consuls even visit Hong Kong every month for shopping and dining. Unfortunately, tragic events happened even before this Covid-19 pandemic. Hong Kong has gradually lost its luster. The airport is deserted; the hotels are empty and restaurants are closing down. From being the shopping paradise of the East, Hong Kong has become a no man’s land. Tourists have avoided Hong Kong like the plague.