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Quarterly Analysis of Loans for use in Hong Kong by Major Economic Sector
Loans for use in Hong Kong accelerated further in the June quarter to 5.1%, from 3.4% in the March quarter, underpinned by buoyant residential mortgage loans and other property- and construction-related lending. Loans to most other sectors also rose strongly. In particular, spurred by two share floatations close to the end of June, loans to stockbrokers rose sharply by 30.2%, while loans for wholesale and retail trade increased further by 3.7%, in line with the gradual pick-up in consumer spending. On the other hand, while loans for trade financing registered a strong rise during the June quarter, they continued to decelerate in terms of annual growth, reflecting the slowdown in external trade.
Money Supply
With currency held by the public rising by 0.5% in June and HK$ demand deposits by 3.5%, HK$M1 recorded a 2.2% increase in June. Compared to a year earlier, HK$M1 rose by 5.1%, slightly faster than 4.5% in May. The pick-up in transaction demand for money was in line with the gradual revival of retail sales and favourable responses to new share floatations. HK$M2 and HK$M3 both increased by 2.5% in June, having declined by 0.1% in May.