Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Friday, Dec. 13:
SFC sets up task force to oversee listed companies
Hong Kong’s Securities and Futures Commission has established a task force recently to closely monitor listed companies regarding their compliance with the Securities and Futures Ordinance, said chairman Carlson Tong. The securities watchdog will coordinate with Hong Kong Exchanges and Clearing Ltd. (00388.HK), which oversees listed companies’ compliance with the listing rules, to avoid duplication in regulatory efforts, Tong said. He added that about 25 to 30 percent of complaints received by the watchdog over the past five years involved listed firms, leading to probes of 130 cases in corporate governance issues.
UBS expects China to lower growth target for next year to 7%
The Chinese government may lower its growth target for next year to 7 percent as it gives more priority to economic structure reform than headline GDP expansion, UBS A.G. said. Some industries will see a bumpy ride, leading to a few company closures, it said. The banking sector would see its average profit growth slide to a mid-single digit. The country is likely to maintain a prudent stance on the growth of money supply, leading to smaller credit expansion, the Swiss financial institution said.
ECONOMY AND BUSINESS
Rykadan Capital sees property sales driving revenue next year
Interview: Rykadan Capital Ltd. (02288.HK) has sold all of the completed units, worth a combined HK$2 billion (US$257.94 million), in its first property project in Hong Kong’s Kwun Tong district, said chairman William Chan. The firm holds a 65 percent stake in the project. Sales will be booked next year, contributing to a big portion of the company’s revenue, Chan said, adding that the commercial investment properties currently under construction in Shanghai and Hong Kong will be topped, generating constant income stream for the company soon.
Mak Lee Int’l seeks orders from CNOOC first deep water project
Interview: Mak Kee International H.K. Ltd. is eyeing sales of steel wire to Chinese oil companies for oceanic exploration in deep water, in a bid to tap into a new area that mainland oil firms are pursuing, said managing director Alfred Lam. The wire maker is in talks with CNOOC Ltd. (00883.HK), seeking to be a supplier in its first deep water project, Liwan 3-1. The company has previously made sales to CNOOC’s projects through the oil firm’s foreign partners.
China said to reorganize units under national railway corporation
The Chinese government is said to restructure the existing 18 railway bureaus under China Railway Corp. into seven regional companies, each with a new chairman to be appointed to the board. The authority has decided on who would be the chairmen of the companies, the 21st Century Business Herald reported, citing sources familiar with the situation. The move, which observers expect will benefit the whole market, will be launched in March next year.
Leung to pay duty visit to Beijing next week
Hong Kong Chief Executive Leung Chun-ying will pay a duty visit to Beijing on Monday, marking the first time he will deliver a work report to President Xi Jinping and Premier Li Keqiang after they took office in March. Three ministers — Chan Ka-keung, Greg So and Anthony Cheung — in charge of financial services, economic development, and housing and transport are said to be joining the trip to meet the relevant ministerial officials.
Beijing hopes to institutionalize powers over Hong Kong, Lau says
As Hong Kong moves towards universal suffrage, the central government in Beijing will institutionalize its powers over the city’s affairs under the “one country, two systems” policy, former head of the Hong Kong government’s Central Policy Unit said. Lau Siu-kai said one example is that the annual duty visit of the Chief Executive to Beijing would become institutionalized. Previous duty visits had been more relaxed, with the chief executives being able to decide “to report whatever they want”, he noted.
Quantitative easing exit will proceed slowly
The US Federal Reserve is expected to begin reducing the amount of bond-buying this month or early next year. The key question now is not the timing of the tapering of quantitative easing, but how the Fed adopts other policy tools to maintain market confidence in its commitment to maintain a relaxed monetary environment while tapering. The tapering will be a long process. A return to interest rate increase cycle will not happen soon.
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(First posted: 08.13)