22 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 Friday, Nov. 22:


Ping An online credit platform sees strong growth in demand

Shanghai Lujiazui International Financial Asset Exchange Co. Ltd., the online person-to-person credit platform under Ping An Insurance Co. of China Ltd. (02318.HK), has seen its business expand at a fast pace since it commenced operation in January, the insurer’s president Alex Ren said. The platform completed 300 billion yuan (US$49.24 billion) worth of loan deals in August, compared to 30 million a month in the beginning. Ren says the platform will still be in its investment phase in the coming two to three years, tapping into the free interest rate environment in the online financing market that may surpass the scale in the United States by 10 to 20 times in the next five years.

Former US securities watchdog head calls for minority shareholder protection in HK

Interview: Hong Kong should set up its own regime to protect the interests of minority shareholders before it considers putting in place a dual-class share structure in the city’s capital market, said Mary Schapiro, former chairperson of the US Securities and Exchange Commission. Schapiro, who once headed the US Commodity Futures Trading Commission as well, also called for the Hong Kong public to evaluate from a broader perspective the impact of various share structures on the corporate governance of listed companies. She was responding to questions about the saga of Alibaba Group’s purported listing plan.


Top govt financial advisory body reviewing Hong Kong IPO regime

The Financial Services Development Council of Hong Kong, the government financial advisory body, is studying the factors that may undermine the city’s attractiveness for initial public offerings, said Joe Ngai, one of the council members. The scope of the review includes the city’s listing regime and share structures. Ngai said the current regulations over the capital market in Hong Kong have been inclined to serve the retail investors. The new regime should more take into account the market structures and procedures for IPO.

Glorious Property gets HK$4.57 billion buyout bid from controlling shareholder

Glorious Property Holdings’ (00845.HK) largest shareholder Zhang Zhirong {張志熔} has proposed a buyout bid worth about HK$4.57 billion (US$589.49 million) to privatize the mainland developer. Zhang is seeking to pay minority shareholders HK$1.8 per share for the privatization, representing 45.2 percent premium over the stock’s last closing price. Zhang currently holds 68.19 percent of the issued shares of the company, which has seen its share price slide 72 percent since it listed on the stock exchange in 2009.

Settlement agreements deemed effective in regulatory action, US SEC ex-chief says

Mary Schapiro, former chairperson of the US Securities and Exchange Commission, said reaching settlement agreements with financial institutions regardless whether or not they admit to the allegations involved is an effective way to resolve a situation. Such settlements, which usually come with huge fines, can result in repayments to investors in a shorter period of time, whereas insisting on proceeding with legal procedures may not guarantee a ruling in favor of the securities watchdog, she said. 



NPC official Li Fei to speak on political reform in Hong Kong on Friday

A senior Chinese National People’s Congress official said he would express views on his understanding on Hong Kong’s Basic Law in a speech on Friday. Li Fei, deputy secretary general of the NPC, and another official, Zhang Rongshun, arrived in Hong Kong yesterday for a three-day trip on the eve of a government consultation on political reform scheduled for next month. In Beijing, a Politburo member, Li Yuanchao, reiterated that Beijing supported democratic development of Hong Kong in accordance with the Basic Law and NPC resolutions.

TVB bans Apple Daily from covering its events, artists

Hong Kong’s TVB, the leading free-to-air broadcaster, announced yesterday a ban on the reporters of the Next Media from covering the broadcaster’s artists and events. It accused the media group owned by Jimmy Lai of attacking and smearing it and calling on people to boycott its anniversary celebration gala show on Tuesday. Cheung Kim-hung, chief editor of Apple Daily, the main publication of the group, said the group merely reported facts. He expressed regret over TVB’s decision. Hong Kong Journalists Association said it fears the move would set a bad precedent in curbing press freedom.


Weaker PMI points to slower China GDP growth in fourth quarter

Growth of China’s factory activity slowed this month on shrinking new export orders. The HSBC China Flash Purchasing Managers’ Index fell to 50.4 from last month’s reading of 50.9. The effects of economic stimulus in the first quarter have begun to weaken with replenishing of stock in factories slowing. Meanwhile, the greatest risks of China’s economy are local government debts, property bubbles and shadow banking. Such risks will get worse if China adopts fresh stimulus. Taking all factors into account, the growth rate in fourth quarter is likely to be weaker.

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