Ackman’s big Hong Kong short comes at a bad time

Better- equipped: A Hong Kong dollar note is seen in this illustration. At US$417bil (RM1.9 trillion), Hong Kong’s foreign exchange reserves offer plenty of firepower for the city to defend the currency in the face of capital outflows. — Reuters

BILL Ackman’s revelation that he’s betting big on a collapse of Hong Kong’s pegged dollar will come across as contrarian to some in the market and mistimed to others.

The city’s multiple interventions to prop up its currency since May have made shorting it unprofitable, sending interbank rates higher than their US equivalents, chilling a once-popular carry trade.