At the end of the first quarter, Hong Kong pension funds had an average exposure to the Hong Kong stock market of 29% of total assets, down from 35% at year's end, according to Grahame Stott, director and consulting actuary of the Wyatt Co. (H.K.) Ltd.
According to Mr. Stott, much of the money was shifted out of Hong Kong's market - and often into Japan's - in step with the Hong Kong market's sharp drop this year. However, "from here, the consensus is that there is still value in the Hong Kong market," although some problems loom, including the market's reaction to the eventual death of China's leader Deng Xioping, he said.
Thus, as they balance the economic attractiveness of Hong Kong with political concerns, Hong Kong funds are likely to try to maintain a neutral weighting in their home market of about 25% to 30% of total assets, he predicted.
