Hong Kong’s tax hike on share trading was a “convenient catalyst” that helped spur a healthy correction for the city’s markets, says Tim Moe from Goldman Sachs.
The government announced in its budget on Wednesday that stamp duty on stock transfers will be raised to 0.13% from 0.1%.
The move sparked a sharp sell-off in the broader markets on Wednesday, but stock prices bounced back partially on Thursday.
The Hang Seng index rose 1.2% on Thursday, after falling about 3% a day earlier.
Meanwhile, Hong Kong Exchanges and Clearing saw further losses and slipped 1.77% on Thursday, after the previous day’s plunge of more than 8%. The HKEX operates the city’s stock exchange and on Wednesday posted a more than 20% year-on-year surge in its 2020 profit attributable to shareholders.
“I think it’s important to note that the overall increase, I mean yes it sounds like 30%’s a big number,