Danger is lurking for Hong Kong stock market!

https://www.bloombergquint.com/china/2018/02/28/hong-kong-dollar-falls-to-weakest-since-2007-as-rate-gap-widens

HK dollar is pegged to USD at $7.8 but HK dollar has been depreciating and is at 7.829 now.

The depreciation in the HKD has caused a decoupling of interest rates between Hibor & USD Libor.  The interest rates between HK & US should move in synchronization under normal circumstances.  In a nutshell, HK will follow any increase or decrease in US interest rate.  However, the ample liquidity in HKD is causing an aberration that results in huge Hibor & Libor spread of over 90 basis points.

The HKMA is compelled to intervene in the currency market when it exceeds HKD$7.85 by raising the interest rate to narrow the Hibor-Libor spread.  However, this monetary policy move will cause some negative multiplier effect in the property and stock markets.  The property industry will collapse under the weight of higher interest rate.  Thereafter, the stock market will collapse because HK stock market is heavily property weighted.

Furthermore, China investors have been retreating from HK stock market because they're turning cautious.  China investors are net sellers of HK stock market recently.

http://www.scmp.com/business/china-business/article/2134835/hong-kongs-stock-index-futures-rise-drop-treasury-yield

This chain of events reminisces the Asian Financial Crisis in the past.  First, the currency depreciates and forces the government to act by hiking interest rates to support the currency strength.  Then, other interest rate sensitive sectors get affected by the increasing interest rates which result in the collapse of the stock market.