Date
17 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 Wednesday, Oct. 16:

TOP STORIES

PCCW, I-Cable get green light to enter free HK TV market

Pay-TV operators I-Cable Communications Ltd. (01097.HK) and PCCW Ltd. (00008.HK) have each gained initial government approval to launch two new stations with free-to-air television licenses. But an application from Hong Kong Television Network Ltd. (01137.HK) backed by Ricky Wong was rejected. Secretary for Commerce and Economic Development Greg So said the authority considered a range of factors in making the decision to reject Hong Kong TV’s application, but did not specify those issues. Observers said the decision reflects the government’s preference for existing television operators and unfairness to newcomer Hong Kong TV.

Currency experts back HK$ peg to RMB

Interview: Pegging the Hong Kong dollar to the renminbi could benefit the city’s development as an offshore center for the Chinese currency, experts told HKEJ. Given China’s plan to internationalize the renminbi and its potential to become a major currency in Asia, switching the Hong Kong dollar’s linkage from the US dollar could improve the city’s competitive edge, said Victor Zheng, associate director at the Chinese University of Hong Kong’s Center for Social and Political Studies. Banking guru, former director and deputy general manager at ICBC (Asia) Ltd., Stanley Wong, also said the Hong Kong dollar would be better off pegged to the Chinese currency, given the closer trade and economic ties between the city and the mainland.

ECONOMY AND BUSINESS

China vows to resolve overcapacity on five key industrial fronts

China has pledged to resolve overcapacity in five industries, namely iron and steel, cement, electrolytic aluminum, plate glass and shipbuilding, the State Council said in a directive issued on Tuesday. The move is aimed at promoting a structural change in these industries with a view to upgrading and consolidating existing capacity. It is also aimed at preventing credit expansion in those industries evolving into a systemic crisis in the financial sector. The directive names the provinces of Shandong, Hebei, Liaoning, Jiangsu, Shanxi, and Jiangxi as those needing to streamline their iron and steel sectors.

Wumart, C.P. Lotus tie knot to tap mainland supermarket business

Wumart Stores Inc. (01025.HK) and C.P. Lotus Corp. (00121.HK), a unit of Thai conglomerate Charoen Pokphand Group, have entered into a framework agreement for Wumart to buy 36 stores in Beijing, Shanghai and other centers from C.P. Lotus. Wumart will also subscribe to a combined 9.99 percent of new ordinary shares and convertible preference shares in C.P. Lotus for a total of HK$2.89 billion (US$372.68 million). Meanwhile, C.P. Lotus will invest in 13.77 percent of Wumart’s new H shares for the same amount, with a view to forging an alliance for their mainland supermarket business, the two companies said in a joint exchange filing.

Cabbeen Fashion upbeat on mainland garment market

Interview: Cabbeen Fashion Ltd. (02030.HK), a mainland men’s apparel brand, sees robust growth in China’s garment and fashion market, given rising incomes and steady economic expansion in the country, said chairman Yang Ziming {楊紫明}. The company, which will open its Hong Kong shares to public subscription Wednesday, has received 16.9 percent more orders for the coming spring season as compared with the same period last year. It plans to use 40 percent of the funds raised from its Hong Kong listing to improve design and research.

POLITICS

Pro-government parties join calls to pressure Manila over bus tragedy

Two pro-government political parties followed in the footsteps of the opposition pan-democratic force, calling for more pressure on the Philippine government to meet the demands of families of the victims of the Manila bus hostage incident. The Democratic Alliance for the Betterment and Progress of Hong Kong and the New People’s Party wrote to Legislative Council President Tsang Yok-sing to appeal to Philippine President Benigno Aquino over the issue. They also proposed a suspension of visas for Filipino visitors.

Veto likely in no-confidence vote against Leung

A group of 23 pan-democratic legislators will move a motion of no confidence against Hong Kong Chief Executive Leung Chun-ying for his litany of governance fiascos at a Legislative Council meeting on Wednesday. But the motion is set to be vetoed by the pro-government camp, which holds the majority of seats in the legislature. Civic Party legislator Kwok Ka-ki, who will initiate the motion, said Leung has not only failed to unite society, he has widened social divides. Kwok’s party colleague, Alan Leong, said Leung has lost public trust and humiliated Hong Kong people over his handling of the Manila bus hostage crisis.

EDITORIAL

HK government urged to plug loopholes in stamp duty levy

Hong Kong should plug loopholes in its stamp duty law that may allow non-permanent residents to evade the levy by buying property in their children’s name. Officials told lawmakers yesterday that some children of non-permanent residents will be exempt from the levy. But the exemption will open a floodgate, and the government should stipulate that only permanent residents who are 18 or above are entitled to the stamp duty exemption.

COMMENTS

Leung urged to keep up HK’s international status 

Hong Kong people felt humiliated when they saw Chief Executive Leung Chun-ying being sidelined at his recent meeting with Philippine President Benigno Aquino, former civil service minister Joseph Wong wrote. “Old Hongkongers” contributed to the nation’s development with their success in integrating with the world’s economy, democracy, rule of law and other core values and practices. Leung has stepped up efforts to develop “inner-diplomacy” with other parts of the mainland since taking office but he does not deserve to be a “new Hongkonger” if Hong Kong, under his reign, loses its international status and value.

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