Hours later, the company cut the rating on local- and foreigncurrency issuances to “Aa2” from “Aa1” and changed the outlook to “stable” from “negative”. It was the territory’s first cut in ranking by Moody’s since the Asian financial crisis in 1998.
“Credit trends in China will continue to have a significant impact on
Hong Kong’s credit profile due to close and tightening economic, financial and political linkages with the mainland,” said Moody’s in its statement.
Closer financial ties “risk introducing more direct contagion channels between China’s and car. This space is only for focusing on brand building,” said Xu Jing, the Hyundai executive in charge of the project.
The centre was planned before the recent political tensions, but its completion is now a key plank in Hyundai’s efforts to regain a lost position in China as local carmakers and European brands Hong Kong’s financial markets”.
Hong Kong’s government said in a statement on its website shortly afterward that it disagreed with the decision by Moody’s, citing Chan.
The ratings company’s overlooked “sound economic fundamentals, robust financial regulatory regime, resilient banking sector and strong fiscal position”, said the government.
Chan, who was appointed financial secretary in January, said Moody’s concern for China’s economy lacked objective evidence because growth and exports this year had improved, gain ground. Volvo-owner Geely and Great Wall Motor are also looking to move upmarket.
The branding store ventures into territory traditionally held by premium names such as Daimler’s “Mercedes me” stores and BMW’s brand centres, already in China.
Hyundai is also considering using while steel and coal oversupply had eased.
In response to Moody’s “contagion channels” worry, Chan said Hong Kong’s financial system was very stable and it has policies in place to improve risk management for mainland-related loans.
The rating firm’s outlook cut in March last year had proven to be “exaggerated” based on economic growth since then, Chan also wrote.
Moody’s cut Hong Kong’s outlook to “negative” from “stable” last year because it said the city’s credit profile tracked China’s. Days earlier, it lowered China’s credit-rating outlook, highlighting the country’s surging debt burden and questioning the government’s ability to enact reforms. Bloomberg complete knock-down (CKD) kits shipped from South Korea to assemble Genesis cars in China, more than halving import tariffs to 10 per cent, said two people.
Building Genesis cars from kits in China would also prevent technology leaking to its local jointventure partner, BAIC , one of the people added. Reuters
Hyundai Motor will open a brand experience centre in September in Beijing’s 798 Art District, a trendy hub of refurbished factory buildings.