HONG KONG, Oct 13 (Reuters) - Hong Kong leader Donald Tsang is set to deliver his annual policy speech on Wednesday at 0300 GMT, and will likely address the financial hub's overheating property market and growing offshore yuan trade.
In the wake of persistent warnings from officials that Hong Kong risked a property market bubble, analysts said Tsang could announce further measures to clamp down on speculation, which has seen prices rise by almost 50 percent for the broader property market since the start of last year.
With poverty on the rise in Hong Kong, which has one of Asia's worst wealth gaps, public pressure has been building on Tsang to make housing more affordable.
Market participants say policies might include boosting land supply, policies to help lower income families purchase homes, and moves to tighten residential mortgages.
At the end of trade on Tuesday, the Hang Seng Index <.HSI> was down 0.4 percent, slipping from a more than two-year peak, with the property sub-index <.HSNP> down 1.3 percent.
On the financial front, Tsang will likely seek to deepen ties with China on yuan settlement trade, with the former British colony becoming a major offshore yuan centre. The move could substantially bolster Hong Kong's financial services industry in coming years and help its economy, which grew 6.5 percent in the second quarter from a year earlier. [ID:nPRWP126]
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Hong Kong stocks are set to open higher on Wednesday following further indications that the U.S. Federal Reserve will pump liquidity into the system and with the market closely following Tsang's speech. [ID:nTOE69C01A] (Reporting by Lee Chyen Yee, James Pomfret and Saikat Chatterjee in Hong Kong; Editing by Chris Lewis) (See www.reutersrealestate.com for Reuters' global service for real estate professionals)