Although investors are now concerned about the slowdown in the PRC’s economic development, we are of the view that the growth of the PRC’s gross domestic product will still be maintained at a reasonable level, and the Central Government of the PRC will continue its restructuring of the economy and the financial market which are considered positive factors to the market. Hong Kong, a major international financial centre, will benefit from such reforms. Also, after the Shanghai-Hong Kong Stock Connect, the representative of the China Securities Regulatory Commission had expressed that the Shenzhen-Hong Kong Stock Connect may also be launched in the second half of the 2016 calendar year. To capture such opportunities, in addition to our existing brokerage business, we have planned to broaden our financial services to include asset management and other corporate finance services, e.g. sponsor service.
We expect that the growth momentum of real estate-backed loan service will be sustained for a long period of time. To accommodate the ever-increasing demand for our mortgage loans, in addition to our own internal resources, we will continue to utilise external facilities to support our mortgage financing business development. However, to cope with the keen competition in the market, we will continue to reinforce our credit assessment of new loan applications, and fine tune our business strategy from time to time to adapt for market changes.
Although the Federal Reserve raised interest rates at the end of 2015, we expect that further interest rate increases will likely be at a gradual pace due to the considerable uncertainties that still surround the outlook of global economic activities. As such, we consider that the Federal Reserve’s shift in interest rates would have no significant immediate impact on the real estate market in Hong Kong. On the other hand, due to the boost of cross-border financial activities, it is expected that there will be a huge demand for the commercial properties in Central, which is expected to be a strong support to the rental value of properties in that district as well as the property in the Central district of Hong Kong that is owned by us.