HONG KONG: Most Hong Kong's business professionals are becoming more optimistic about local economic conditions in 2010, as they expect the city's economy to emerge from the gloom of the global financial crisis, international accounting body CPA (Certified Public Accountants) Australia said yesterday.

The Hong Kong China Division of CPA Australia found in its recent survey that around 65 percent of the respondents are forecasting satisfactory economic conditions in Hong Kong next year, and they anticipate the city will strengthen its position as a key listing destination in Asia.

Professionals in the survey also expect the continuation of the SAR government's stimulus package, a buoyant property market and more liberal credit facilities provided by banks as the other top drivers for economic growth over the next 12 months.

"Continuing support from the government towards business, in particular small and medium enterprises, is important for 2010. Respondents are forecasting increases in staff salaries and office rent next year, so easier access to finance will be crucial," said Loretta Shuen, president of CPA Australia Hong Kong China Division.

The survey has interviewed 222 professionals from November to December, in business sectors including accounting, insurance, financial services and consultancy.

Around 78 percent of the respondents, meanwhile, do not believe a second wave of the global financial crisis will strike in 2010.

However, asset prices rising too high and too quickly and a new disclosure of toxic debt from emerging markets were identified as the major factors that would cause another global financial downturn.

Charles Wong, councilor of CPA Australia Hong Kong China Division, said yesterday that the recent surge in real estate and equity markets is unlikely to trigger significant inflation in Hong Kong in 2010.

"Although the majority of foreign capital inflow has been invested in the property market in Hong Kong, buyers of local luxury homes are mostly cash-rich investors. Therefore, we don't expect the rise in asset price will touch off serious inflation next year," Wong said.

Regarding the business performance of companies operating in Hong Kong this year, respondents in the survey cited a drop in transaction volumes and cost of sales as the biggest internal factors that affected the profit margin.

The deterioration of the US economy and the slowdown of mainland exports, meanwhile, were also seen as the most influential external factors reducing profitability in 2009.

"The decrease in overseas demand has been a major impact on local businesses this year, as the city's economy has been relying very much on the external economic conditions," Wong added.

The business outlook for 2010, however, is more positive with 73 percent of respondents estimating their company to perform satisfactorily, while nearly a quarter expect to expand their operations.

(HK Edition 12/22/2009 page4)