Date
15 October 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 Thursday, Oct. 10:

TOP STORIES

Hong Kong keeps ban on dual-class share listings

Hong Kong regulators will continue to uphold the principle that only shares of a single class with the same set of rights can be floated in the city. Hong Kong Exchanges and Clearing Ltd. (00388.HK) has no plan to allow dual-class shares to be listed in the markets, Secretary for Financial Services and the Treasury Chan Ka-keung told lawmakers, as such a listing proposal by Alibaba Group Holding Ltd. has raised public concern. The government intends to keep the authority to review listing applications in the hands of the bourse operator, Chan said, noting that the dual filing regime backed by the Securities and Futures Commission can counteract any potential conflict of interest involved in the review process.

Tianjin, Qingdao, Xiamen seek to establish free-trade zones

Tianjin, Qingdao and Xiamen are considering turning their duty-free zones into free-trade areas similar to that established recently in Shanghai. The Tianjin Dongjiang Free Trade Port Zone will be transformed a free-trade area, aiming to become an international logistics hub in the coming five to 10 years, according to a proposal it submitted to the State Council. Meanwhile, Qingdao is planning to transform its Qianwan duty-free zone into a free-trade area, specializing in regional and international trade and commerce. Xiamen authorities also seek to establish a free-trade zone tailored for Taiwan-related trades.

ECONOMY AND BUSINESS

Hang Seng Index seen rising to 24,000 next year

Brokerages forecast Hong Kong’s benchmark Hang Seng Index will reach 24,000 next year as a rebound in the economy and potential supportive measures may boost telecommunications, technology and utilities sectors. Fan Cheuk-wan, Credit Suisse A.G. managing director and head of research for Asia Pacific of private banking and wealth management division, and Steven Sun, HSBC global research and head for China equity, both expect the city’s stock markets to gain momentum by the end of this year. However, they have warn of more volatility in the property market.

Thai conglomerate joins Carlyle in bidding for ParknShop

Charoen Pokphand Group, a conglomerate backed by Thai tycoon Dhanin Chearavanont, is said to linking up with private equity fund Carlyle Group LP in the bidding for ParknShop, which Hong Kong billionaire Li Ka-shing plans to spin off from Hutchison Whampoa Ltd. (00013.HK), sources said. However, CP Lotus Corp. (00121.HK), the Thai company’s Hong Kong-listed unit, said it has not entered into any relevant acquisition discussions. Meanwhile, China Resources Enterprise Ltd. (00291.HK) has reportedly given up on its plan to bid for the chain. The supermarket chain is said to have asked for US$3 billion to US$4 billion as purchase price.

Lai Sun remains upbeat on Hong Kong property market

Hong Kong’s property market is expected to remain healthy as the existing low-interest rate environment is likely to last until the second half of next year and that a lack of supply of home units will sustain the current property price levels in the city, Lai Sun Development Co. Ltd. (00488.HK) deputy chairman Chew Fook-aun told HKEJ. The company has no plans to cut prices or offer tax subsidies to buyers as its rivals do. It is also eyeing the leasing market of commercial properties, aiming to achieve more than HK$800 million (US$103.17 million) rental income annually by 2015.

POLITICS

Radical legislators propose ban on Philippine domestic helpers over hostage killing

Legislators from a radical pro-democracy political group plans to introduce an amendment to a Hong Kong law to ban Filipino domestic helpers from working in the city until after the Philippine government apologizes over the Manila bus hostage killing. Other pro-democracy and pro-government lawmakers have voiced reservations about the idea. Families of the victims said they were undecided about the proposal as they did not want their demands for the Philippine government to say sorry and offer compensation to affect Hong Kong families.

Hong Kong needs mainland migrants to be new ‘Hongkongers’, People’s Daily says

The official People’s Daily said Hong Kong needed mainland migrants to become “new Hongkongers” for its long-term development. The Communist Party mouthpiece said in its overseas edition yesterday Hong Kong people should not feel worried about mainland migrants. As the birth rate of the city was low, mainland migrants could become a major source of population growth, it said. The article said most mainland migrants have higher education background and can stand on their own without relying on doles.

EDITORIAL

Fed under Yellen tipped to go slow in tapering of QE

Janet Yellen, the vice chairman of the US Federal Reserve named by President Barack Obama to succeed Fed chief Ben Bernanke, will take office in January if her appointment is endorsed by Congress. It is widely expected that the Fed will maintain its moderate monetary policy and that its planned tapering of quantitative easing will proceed in a gradual and orderly manner. But in view of the nation’s soaring debt and unsteady economic recovery, Yellen will be facing a more arduous task in directing the monetary policy.

COMMENTS

Whistle-blowing not enough in anti-graft battle, Yuen says

Guangdong has followed in the footsteps of central authorities to set up an anti-corruption website for the public to report cases of graft. But the anti-graft battle cannot rely on reporting alone. A monitoring mechanism should be put in place in the government systems to prevent bribery, veteran China watcher Edgar Yuen wrote. Despite Beijing’s repeated orders for officials to disclose government spending on banquets and other items, local governments and departments have only made cosmetic moves to release the relevant information. The disclosure policy becomes nothing but empty words.

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