Chan says world financial markets to remain volatile

Hong Kong will remain imperiled in 2012.

Capital flows will remain highly unpredictable and financial markets could be very volatile in 2012, Monetary Authority Chief Executive Norman Chan said.

He noted the outlook for 2012 is still fraught with uncertainty as the U.S. and European governments grapple to restore their economies to the path of growth.

He said Europe still faces uncertainties arising from its sovereign debt, while the U.S. will continue to be troubled by the slow improvement in the labour and housing markets.

Chan said Hong Kong must prepare for any downside risks originating from Europe and the U.S., adding the city must guard against the risk of renewed exuberance in the property market.