Hong Kong banks foresee new mortgage loans to drop

Blame it on reduced transactions.

According to Nomura, there was no change to the three-month Hibor and Libor, remaining at 0.38% and 0.28%, respectively. The 10-year UST yields fell 1bp w-w to 1.71%.

Over the past week, both Hang Seng Bank and Bank of East Asia commented that new mortgage loans in 2013F are likely to be lower than last year.

Here's more from Nomura:

Hang Seng Bank attributed the likely drop to reduced transaction activity. Further, commenting on the recent mortgage rate hike, Hang Seng Bank indicated that the 25bp hike was smaller than expected and that a further hike would depend on market conditions.

Bank of East Asia also commented that the 25bp uplift did not fully reflect costs due to the introduction of stricter mortgage stress testing.