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 Thursday, Nov. 28:


Another senior official resigns, hitting Leung’s administration

Julia Leung, Under Secretary for Financial Services and The Treasury, has resigned from her position with effect from Jan. 1, the Hong Kong government announced. It marks the sixth senior official to step down since Leung Chun-ying became the city’s chief executive, apart from two other advisers in the Executive Council who had left earlier. James Lau, former chief executive of Hong Kong Mortgage Corporation, has been named to fill the Under Secretary post. Observers are speculating that Julia Leung, who resigned for personal reasons, may pursue a higher role in the International Monetary Fund.

Woo stepping down from Wheelock chairmanship to let son take over

Peter Woo is stepping down as the chairman of Wheelock and Co. Ltd. (00020.HK) but will remain on the board as a senior director, the company said in a stock exchange filing. Woo’s son Douglas Woo has been elected as the new chairman from Jan. 1, while keeping his capacity as the company’s managing director. Peter Woo, meanwhile, will maintain his chairmanship at subsidiary Wharf (Holdings) Ltd. (00004.HK).


JPMorgan cuts target prices, investment ratings on seven property developers

JPMorgan Chase & Co. has downgraded seven property developers based in Hong Kong, with target prices cut by 9 percent to 26 percent amid gloomy prospects in the real estate market. The brokerage says property prices in the city may slide 20-30 percent next year. Among the developers that were downgraded are Henderson Land Development Co. Ltd. (00012.HK), Sino Land Co. Ltd. (00083.HK)
and New World Development Co. Ltd. (00017.HK). However, Cheung Kong Holdings Ltd. (00001.HK) and Sun Hung Kai Properties Ltd. (00016.HK) were upgraded due to their buoyant business overseas.

Shenzhen HeungKong wins Qianhai land plot at record unit price

Shenzhen HeungKong Holding Co. Ltd. (600162.CN) has won in an auction a commercial land plot in the Qianhai special economic zone in Shenzhen for 1.63 billion yuan (US$267.53 million), which translates into 25,000 yuan per square meter, marking a new high in the area that breaks the 21,670 yuan record made by China Resources Land Ltd. (01109.HK) in August. Shimao Property Holdings Ltd. (00813.HK), meanwhile, won a plot in a nearby site for 16,000 yuan per square meter in the Wednesday auction.

Alibaba launches financial cloud services for banks

Alibaba Group Holding Ltd. has launched a new service to enable over 2,000 regional banks across the country to provide their clients with online payment and other service at a faster pace but lower costs through the multimedia giant’s “financial cloud” platform. The platform has supported Alibaba’s electronic store to execute 16.79 million transactions worth a combined 6.1 billion yuan for its clients during an online shopping festival earlier this month. Xiamen Bank Co. Ltd., Tianjin Rural Commercial Bank Co. Ltd. and Guangdong Nanyue Bank Co. Ltd. are among the first batch of banks using the financial cloud service.


Former Hong Kong anti-graft head condemned for ‘deplorable’ over-spending

Hong Kong lawmakers made an unprecedented strong condemnation of a former anti-graft chief Timothy Tong for his “deplorable” breach of rules in handling banquets, gifts and overseas trips during his five-year tenure. A Legislative Council committee said in a report on the allegations made in an Audit Commission report that Tong’s “ignorance and total disregard” of the rules is out of line with the public’s expectations for the head of the Independent Commission Against Corruption. It described the overspending as “inexcusable”. Tong said in a written response that he hopes lawmakers could give details of the specific laws he had violated.

Henry Tang’s wife fined HK$110,000 in illegal basement case

In a dramatic development, a lawsuit against Lisa Kuo Yu-chin, wife of former Hong Kong chief secretary Henry Tang, over an illegal basement at their house was brought to an end yesterday after a second charge against her was dropped following an agreement between lawyers from defence and the prosecution. Kuo was fined HK$110,000 by Kowloon City Magistrate Ko Wai-hung over the huge basement, whose revelation by the media had derailed Tang’s chief executive bid last year. Tang said after the ruling that he felt relieved now that the case is over.


PBoC chief maps out financial reform

People’s Bank of China governor Zhou Xiaochuan {周小川} revealed at a forum Tuesday China’s plans to increase the quotas for Qualified Domestic Institutional Investors (QDII) and Qualified Foreign Institutional Investors (QFII). The move shows Beijing is striving to speed up the pace of liberalization of exchange rate, interest rate, capital account and market access. As the reforms are far-reaching, it remains to be seen if the authorities will be able to eliminate resistance from vested interests. Deepening reform and anti-corruption drive, therefore, must proceed simultaneously.


China shoots its foot in air defence identification zone

Beijing was caught in a dilemma when two US B50 bomber jets flew over China’s newly-established air defence identification zone (ADIZ). It faced difficulty in either acting to respond or not to react to the US military move. China will face with another challenge if it decides to set up another ADIZ that covers South China Sea. Its neighboring countries including Vietnam, Philippines, Brunei, Malaysia and Indonesia will be provoked, giving momentum for Washington’s plan to “return to Asia”.

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