Date
12 November 2018

HKEJ Today: Highlights

Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Friday, Oct. 4:

TOP STORIES

Bank of Chongqing said to seek up to US$1 billion from Hong Kong listing

Bank of Chongqing Co. Ltd. is said to be planning to raise US$800 million to US$1 billion from an initial public offering in Hong Kong. Goldman Sachs Group Inc. and Morgan Stanley have been named as the arranging banks. The Chinese urban commercial lender is seeking approval from the listing committee of Hong Kong Exchanges and Clearing Ltd. (00388.HK), Thomson Reuters publication International Financial Review reported, citing sources familiar with the matter. Investor roadshows will kick off later this month, it said. The bank recently dropped its application for a listing in the mainland markets for the second time in almost five years, Chinese media reported last month.

Shanghai free-trade zone brings both opportunities, challenges to HK, experts say

The new Shanghai free-trade zone is likely to bring both opportunities and challenges to Hong Kong, economists said. The new zone will serve the functions similar to an offshore financial center like Hong Kong, setting an example to other mainland cities that may be allowed to follow suit, said Tao Dong {陶冬}, chief regional economist for non-Japan Asia at Credit Suisse A.G. This poses a threat to Hong Kong in the long run, given a loosened grip from the central government over financial innovation in the zone, he noted. Meanwhile, Nathan Chow, economist at DBS Bank (Hong Kong) Ltd., expects the new free-trade area to provide Hong Kong more chances to play a third-party role in offshore renminbi businesses.

ECONOMY AND BUSINESS

Mainland stock markets may be boosted by top CCP meeting 

Interview: The potential initiatives on urbanization, land reforms and welfare benefits, among others, that may be unveiled during a top political meeting of the Chinese Communist Party next month are likely to give short-term boost to the mainland stock markets, said Fong Wai-cheong, director for Asia-Pacific equity investment at Baring Asset Management (Asia) Ltd. Consumer plays including infant formula makers and other counters in the medical and technology sectors will benefit, Fong said, adding that developers which build small to medium-sized residential properties for the mass market is also likely to receive some push. However, the overall stock market may be dragged by the economy that is expected to grow slowly from the fourth quarter through the first quarter next year, Fong added.

Macau seen posting record gaming revenue in October

Macau’s gaming revenue may hit a new record high this month on rising number of visitors, giving rooms for casino operators to raise the minimum bets, said Union Gaming Research Macau. The number of mainland travelers to the city has increased 14 percent from a year ago to 218,000 during the first two days of the National Day holidays. Analysts at Deutsche Bank A.G., meanwhile, said mainland visitors to Macau from provinces off Guangdong have been rising with their spending double those from Hong Kong. Macau’s gaming sector has generated MOP$29 billion (US$3.63 million) of revenue in September, down 6 percent from a month ago or up 21.4 percent from a year ago, the city’s Gaming Inspection and Coordination Bureau said.

Connection fees paid to China Mobile by Unicom, China Telecom said to halve

The connection fees paid by China Unicom Hong Kong Ltd. (00762.HK) and China Telecom Corp. Ltd. (00728.HK) to China Mobile Ltd. (00941.HK) are said to be halved, while the fee payee is allowed to enter the fixed-line broadband market, the Ministry of Industry and Information Technology was cited as saying by ENN Weekly, a publication under the state-owned Xinhua news agency. The net profit of China Mobile is estimated to drop 10 percent after the purported change, the report said, citing industry sources. In contrast, those of Unicom and China Telecom may rise more than 50 percent. The change possibly heralds the authority’s intention to incentivize the two smaller telecoms companies to develop TD-LTE 4G networks, analysts said.

Pro-democracy coalition proposes Legco universal suffrage blueprint

A pro-democracy Hong Kong coalition, formally known as True Universal Suffrage Alliance, has proposed that the 2016 legislature be comprised of 80 members with 60 of them returning through geographical constituency elections and the remaining 20 from functional bodies. It said the existing 30 functional constituency seats should be re-grouped into three broad constituencies with fewer seats. Of the 80 seats, one option is to keep the present 35 seats and the other 25 seats through proportional representation system based on one single territory-wide constituency. The alliance said the total number of seats should be increased to 90 in 2020 with no more functional constituency seats.

HK govt says Berlusconi case in 2007 handled in accordance with law

Hong Kong’s Justice Department said in a statement on Thursday that it had handled a transfer to Italy of evidence seized in Hong Kong in 2007 in accordance with the law without taking into account any attempt to arrange a meeting between former chief executive Donald Tsang and the Pope. It gave a detailed account of the process of a political ally of Italian ex-premier Silvio Berlusconi trying to interfere with the transfer of evidence involving the disgraced former premier in a money laundering case. The department said its then head Wong Yan-lung had never contacted Duncan Pescod, who was approached by Berlusconi’s ally, on the matter.

EDITORIAL

Stronger ties between China and Asean following Xi’s trip poses challenge to China-US ties

The visit of Chinese President Xi Jinping to Southeast Asia and the forging of strategic partnership with Indonesia during the trip have laid down new foundation for China’s increased cooperation with Asean countries. But in view of the vast differences in the developments of countries and the United States’ “rebalancing policy” in the region, the geopolitical situation will become more complex. The rivalry between China and the US in the region will only grow fiercer with the gap of differences between the countries’ overall strengths narrowing, posing a challenge to the rational political judgment of the leaders from both sides.

COMMENTS

Mathieson’s credentials, sincerity in heading HKU challenged

A senior academic at the University of Hong Kong has challenged the credentials and sincerity of Professor Peter William Mathieson, Bristol University’s dean of medicine, in taking up the post of vice chancellor of the city’s leading university. Yuen Chan, head of HKU’s Journalism and Media Studies Centre, wrote Mathieson’s medical background was only a pass, but his experience in China and Asia was almost zero. Chan also questioned Mathieson’s ability to communicate with local people as he did not understand their language. Mathieson was the only candidate recommended by a 11-member HKU panel.

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