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. 11:

TOP STORIES

Alibaba decides not to list in Hong Kong

Alibaba Group Holding Ltd. has decided not to float its shares in Hong Kong, said chief executive Jonathan Lu. The remarks came after the city’s Secretary for Financial Services and the Treasury Chan Ka-keung told lawmakers on Wednesday that regulators have no plans to change existing rules to allow dual-class shares to be listed in the city. The company’s spokesman told HKEJ they have not formally proposed a listing plan to Hong Kong authorities, and it was regrettable that authorities have already drawn a conclusion without seriously listening to what they had to say. Alibaba may now prepare for a listing in New York, sources said.

Tencent expands gaming business in Southeast Asia

Tencent Holdings Ltd. (00700.HK) has entered into an agreement with its major shareholder Naspers Ltd. to step up efforts in developing mobile internet and gaming business in Thailand and India, it said in a stock exchange filing. The company plans to buy from the shareholder certain social networking businesses in the two countries while divesting its e-commerce businesses. Meanwhile, it has also used its call options to raise its stake in a Singaporean gaming firm that focuses on emerging markets including the Philippines and Brazil.

ECONOMY AND BUSINESS

Hong Kong prepares for potential defaults on US treasuries

Authorities in Hong Kong have been preparing for possible defaults on certain United States treasury bonds that are scheduled to be due next Thursday. The city became the first in the world to officially unveil a contingency plan for such an eventuality. Hong Kong Exchanges and Clearing Ltd.’s (00388.HK) subsidiary Hong Kong Futures Exchange Ltd. has raised deposits for any positions that use short-term US treasuries as collateral. Meanwhile, the Securities and Futures Commission has required authorized financial institutions to prepare for such an event.

Hong Kong mulls regulatory overhaul for accountants

The regulation framework for Hong Kong’s auditors and accountants has lagged international standards and thus an overhaul is needed, Financial Reporting Council chairman John Poon said. The council unveiled a proposal to change the regulatory regime that may allow it to take over part of existing authorities from the self-regulatory body, the Hong Kong Institute of Certified Public Accountants. The proposal would significantly increase the spending of the council which may then be shouldered by listed companies.

Airbus sees China cargo demand growing 11 percent a year

Demand for cargo and freight services in China is estimated to grow an average 11 percent annually in the coming two decades, Airbus SAS said in a report. The figure compares with a projected 5.5 percent of rise in Asia and 4.8 percent in the world. The demand in China will be mainly driven by the uptrend in online purchases, likely making the country the market with the fastest growth.

POLITICS

Premier Li steps in to put more pressure on Aquino over bus tragedy

Analysis: Hong Kong Chief Executive Leung Chun-ying was seen as having been embarrassed by Philippine President Benigno Aquino in their meeting on the Manila bus hostage crisis on Monday. The public relations-cum-political fiasco has caused more anger among Hong Kong people, prompting Chinese Premier Li Keqiang to make a strongly-worded plea for the Philippine government to take swift action to resolve the dispute. But now that expectation was raised, people may feel more disappointed if the diplomatic offensive ends in another fiasco. The families of the victims, the Hong Kong people, the SAR and the central government will all become losers.

Ex-Democrat tipped to be Chief Executive’s spokesman

Former Democratic Party central committee member Andrew Fung Wai-kwong, who is widely tipped to be the new spokesman for Hong Kong Chief Executive Leung Chun-ying, has rebutted criticisms that he was not qualified for the job. Remaining non-committal on reports about his imminent appointment, Fung claimed his public relations experience would be an asset for Leung, not a liability as his critics have argued. Critics said Fung was involved in a spate of controversies including his ties with the Democrats, pro-Leung stance and PR skills.

EDITORIAL

China-Europe currency swap line signals quickening of RMB internationalization

China’s central bank and the European Central Bank have signed a bilateral currency swap line that will channel up to 350 billion yuan (US$51.2 billion) to the ECB and 45 billion euros (US$60.7 billion) to the People’s Bank of China. It followed a similar deal between PBoC and Britain’s central bank in July, marking a significant step in the renminbi’s entry into the European market and an acceleration of the pace of internationalization of the Chinese currency.

COMMENTS

Hao Tiechuan backs civil disobedience in 1996 article

The propaganda chief of the central government’s Liaison Office in Hong Kong, Hao Tiechuan {郝鐵川}, floated a novel concept called “positive violation of constitution” in an article in 1996 when he was a legal professor. Hao explained why “gentle resistance” against the law was justified under certain circumstances including failure of the law to meet the people’s changing aspirations. Freelance writer Nan Di {南荻} wrote Hao’s idea was similar to the concept of civil disobedience proposed by University of Hong Kong law professor Benny Tai, who is a core organizer of the Occupy Central campaign. Nan said Hao appeared to have changed his stance now that he became a government official.

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