Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Nov. 14:
Henderson Land wins Sheung Shui residential plot for HK$2.89 billion
Henderson Land Development Co. Ltd. (00012.HK) has won a residential site in Kwu Tung in Sheung Shui district for HK$2.89 billion (US$372.75 million), with the final price topping market estimates by 30 percent. The company plans to invest a total of HK$5 billion into the project that is required by the government to provide at least 515 housing units with a combined 555,000 square feet in floor area. Property agents expect the developer to sell the flats at HK$13,000 per square foot upon completion in four years, setting a benchmark in the district. They said the project is likely to be a milestone in residential development in the northeast New Territories by Henderson Land.
Malaysian tycoon urges China to lift restrictions on public utilities sectors
Interview: Francis Yeoh, managing director of Malaysian conglomerate YTL Corp., has urged nations in Asia, including China, to establish regulatory framework for public utilities businesses and introduce competition into the sector, in a bid to improve market efficiency. Serious social problems may result otherwise, Yeoh warned. Yeoh’s company has been eyeing the mainland market with investments across real estate, cement and retail industries. However, Yeoh sees the restrictions in entering water, power and highway businesses in the country a pointless barrier to international investors.
ECONOMY AND BUSINESS
Link REIT may venture into Guangdong retail market
The Link REIT (00823.HK) is planning to expand its rental business into Guangdong province, tapping into a rising demand for mass-market oriented outlets in the mainland, the management said. However, the plan will only proceed after obtaining approval from unit holders, it said, adding that it is still premature to disclose further details. The REIT has benefited from individual travelers from the mainland, as it saw its rental income from retail shops rise 8.4 percent from a year ago to HK$2.6 billion in the six months to September.
PetroChina buys stakes in three Peru oil fields for US$2.6 billion
PetroChina Co. Ltd. (00857.HK), and its subsidiaries CNPC E&D Holdings Cooperatief U.A. and CNODC International Holding Ltd. have entered into an agreement with units of Peru’s national petroleum company Petroleo Brasileiro S.A. to acquire the entire shares of Petrobras Energia Peru S.A. for US$2.6 billion. The target company is involved in oil exploration and production business in Peru, running three oil fields that produce an annual 800,000 metric tons of oil equivalent. The Chinese energy company has generated 67.5 million barrels of oil equivalent overseas in the first half of this year, representing 9.7 percent of its total production. The deal is pending approvals by authorities in China and Peru.
Hang Seng Index may retreat further in short term, analysts say
The Hong Kong stock market’s benchmark Hang Seng Index is likely to fall more in the short term after the top policy meeting in China came in as a disappointment, triggering a slide in blue chips, analysts said. The index closed down 437 points at the low of the day at 22,463 points on Thursday, pressing against the 250-day average of 22,401 points. Analysts see the decline as a potential start of a technical retreat in the stock market amid a lack of concrete takeaways from the Beijing meeting. But they remain upbeat over the long term as the direction of national reform is clear, they said.
Former Hong Kong top judge suggests court not the place to settle TV license row
Hong Kong’s former chief justice Andrew Li has dismissed as ridiculous that calls for Hong Kong Television Network to take the government to court over its refusal to grant a free-to-air license have come from people who had hitherto complained of abuses of judicial review. He did not name names. Li said courts can only make judgment in adjudicating disputes over legal points and procedures, not political and economic problems, which should be resolved on political platform.
Hong Kong Golf Club land leased for HK$1,000
The Hong Kong Golf Club was granted the lease of a piece of 170 hectares of land with a nominal fee of HK$1,000 by the government when its lease was renewed in 1999, the Director of Audit revealed in a report. The Audit Commission said some points in the lease were unusual and it was granted in “special circumstances”. It urged the relevant authorities to seek the views of the Executive Council when handling similar major cases relating to land for sports and recreational facilities in the future.
Economic liberalization, political tightening pose difficulty in China reform
While affirming that market force should play a “decisive” role in allocation of resources, the Chinese Communist Party’s central committee has stressed the importance of strengthening governing capability in the advancement of socialism. The devolution of powers in economy and centralization of powers in politics will be the basic theme of China’s transformation of its authoritarian system. But market force is not adequate in ensuring fair allocation of resources. A fair political system, ownership and legal systems are far more important in promoting comprehensive and sustainable development in China.
Danger of conflicts between China, Japan to grow if both sides shun talks
The chance of military conflict between China and Japan is likely to increase if both sides keep refusing to sit down and talk, HKEJ founder Lam Hang-chi wrote. Both sides have been stepping up their respective military build-up and rhetoric in defense of their territories. The risk of “accidental” conflict is growing if both sides fail to forge dialogue. The targets of deepening reform will not be difficult to attain. But the fruits of economic reform would be put at risk if military conflicts with Japan occur.
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