Date
19 October 2017

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 Tuesday, Nov. 12:

TOP STORIES

Alibaba’s Ma expects online shopping to dampen property prices

The flourishing online shopping trend in China is likely to dampen the values of commercial real estate in two years amid an expected expansion of electronic commercial enterprises after network upgrades, said Alibaba Group chairman Jack Ma. The remarks came as the group’s e-commerce platform Tmall.com, together with sister entity Taobao.com, posted 83 percent growth in sales on Monday during the annual “Singles Day” online shopping festival on the platform. The total turnover on the day amounted to 35 billion yuan (US$5.75 billion), compared with 19.1 billion yuan last year. Ma expects e-commerce trading can take a 50 percent share of the entire retail sales market in the
mainland by 2020.

Hang Seng Investment Management to launch physical A-share ETF

Hang Seng Investment Management Ltd. plans to launch on Tuesday a physical A-share exchange-traded fund (ETF) under the renminbi-denominated qualified foreign institutional investor scheme with its 1 billion yuan of quota. The Hang Seng China A Industry Top Index ETF (83128.HK), which is set to be the first of its kind in the city to be issued by a non-mainland financial institution, will be listed on the Hong Kong stock exchange by the end of this month. Hang Seng Bank Ltd. (00011.HK) executive director Andrew Fung told HKEJ that it may take some time for the ETF to accumulate liquidity in the market as the index it tracks is still quite new to investors.

ECONOMY AND BUSINESS

QFII set to take 10 percent share of mainland investment market

The quota granted under the qualified foreign institutional investor scheme is expected to contribute to 10 percent of the total investments in relevant asset classes in the mainland capital market, with the quota amounting to an estimated US$160 billion in five years, said William Kwok, chief executive of consultancy firm ChinaQFII Co. Ltd. Authorities have approved a combined US$48.51 billion quota as of the end of October. Kwok also sees more A-share exchange-traded funds getting listed in the United States amid robust demand. Meanwhile, more investors may tap into the medical, telecommunications and public utilities sectors.

Huishang Bank loan growth may slow to 15 percent

Interview: Huishang Bank Corp. Ltd. (03698.HK) is likely to see its loan growth slow to 15 percent in the coming years as China’s economy expands at a slower pace, said chairman Li Hongming []. The bank has been increasing its interbank businesses in the first half this year, in contrast to a contraction trend in the market. Li said the lender made the commercial decision based on the dynamics of its liquidity position and the profitability of the business. He added that he believes the lending business will not be affected much by a potential strengthening of control by regulators over interbank loans. The lender will debut in the Hong Kong stock exchange on Tuesday, making it the second city commercial bank listing in Hong Kong.

POLITICS

Pro-Beijing daily hits out at W K Lam for remarks on TV license

A pro-Beijing Hong Kong newspaper has lashed out at a top government adviser, Lam Woon-kwong, for his call on the Chief Executive to review and learn a lesson from the process of the decision-making on free-to-air television licenses. In an editorial yesterday, Ta Kung Pao questioned whether the challenge by Lam, the Executive Council Convenor, against Leung Chun-ying shows his “incompetence” or attempt to “shirk responsibility”. Lam toned down his criticism, insisting that he did not aim the finger at Leung but rather at the decision-making process. He did not respond to calls for him to resign.

Hong Kong legislators to vote on HK$50 mln relief fund for Philippines typhoon victims

The Hong Kong government will seek approval from the legislature for relief funding of HK$50 million for the victims of last week’s devastating Typhoon Haiyan in the Philippines. Citing humanitarian grounds, some political parties have also reduced their threat of economic sanctions against the Philippines government for its refusal to accept the compensation demands of the families of the victims of the Manila bus hostage killings in 2010. People Power legislator Albert Chan said he would temporarily suspend his private members’ bill that seeks to restrict the approval of work visas for domestic helpers from the Philippines.

EDITORIAL

Abe’s defense expansion sparks fears of armed conflicts with China

Media reports said yesterday that the Japanese government plans to increase funding for its Self Defense Forces while China was also upgrading its air capabilities. The developments have heightened concerns about military conflicts between the two powers in the region. The continued effort by Japan’s Prime Minister Shinzo Abe to strengthen the country’s defense forces to counter China poses a danger to regional security and stability.

COMMENTS

TV license row raises doubts about Leung’s leadership capability, Wong says

China should consider removing Hong Kong Chief Executive Leung Chun-ying from power to help secure the passage of the city’s political reform in the wake of the free-to-air television license row, political commentator Wong On-yin wrote. Wong said Beijing should rethink the role of Leung if it is keen to ensure the approval of the electoral blueprint for the legislature in 2016 and the chief executive in 2017. Leung’s mishandling of the TV license controversy has created a serious crisis to his leadership. It also raised doubts about his capability.

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