20 June 2019

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 Monday, Dec. 16:


Power Assets unveils US$5 billion spinoff plan for Hong Kong unit

Power Assets Holdings Ltd. (00006.HK) has unveiled a plan to float its utility arm in Hong Kong by means of selling share stapled units of HK Electric Investments Ltd. The spinoff unit is seeking a valuation of about HK$48 billion to HK$63.4 billion (US$8.18 billion) and an annualized distribution rate of 5.5 to 7.26 percent. Market sources said the flotation, through which the company plans to list 50.1 to 70 percent of the issued share stapled units, will raise up to US$5 billion.

Mainland property market unlikely to see new curbs near term, Tao says

Interview: The property market in China has become the country’s wild card for avoiding a hard landing of the economy, and it is unlikely to see any new curbs in the near future, said Tao Dong {陶冬}, managing director and chief economist for Asia at Credit Suisse. Beijing has changed its policy on real estate market control from one that was led by government initiatives to one that is more oriented to market forces, ever since Li Keqiang {李克強} became the country’s premier, Tao said. However, he warned that local government debts and shadow banking activities could be a time bomb endangering the country’s stability in the second half of next year if the central government does not act promptly.


First mainland issued global indices tracker product said to be launched soon

Interview: STOXX Ltd., an international index company owned by Deutsche Borse AG and SIX Group AG, expects mainland issuers to launch the first financial product tracking European indices in China, said chief executive Hartmut Graf. The product may be launched early next year, Graf said, adding that his company has been in discussion with certain mainland issuers regarding the potential issuance. The possible move came as China extended its qualified domestic institutional investor scheme and allowed A shares to become constituents of global indices.

Great Wall Motor taps SUV market for internationalization

Interview: Great Wall Motor Co. Ltd. (02333.HK) is heading towards the higher-end segment of the SUV market, in a bid to transform itself into an international brand, said Pierre Leclercq, the newly appointed vice president and design director who has joined the company after leaving BMW AG. The company is constructing a new plant with an annual capacity of one million vehicles. It is seeking to showcase a new design model in Beijing in April next year, aiming for market launch in three years.

Sport apparel and footwear industry still in cloudy skies

China’s sport apparel and footwear industry is yet to shake off the dark clouds although a few market players are said to have seen a rebound in sales, an HKEJ investigation found. Most of the vendors and producers in Chunjiang, the nation’s dominant market place for sportswear, have seen their performance this year even worse than past years in terms of sales, amid a cut-throat price war in a bid to clear stocks. Businesses along the supply chain remain sluggish, wholesalers told HKEJ. Analysts expect more fierce competition in the market given high level of inventory.


Civic Party founder urges democrats to re-set agenda in reform battle

Interview: Founding chairman of the Civic Party, Kuan Hsin-chi, has urged pan-democrats not to fall into the trap of “love China, love Hong Kong” set down by Beijing in the political reform debate. He said democrats should take the initiative to set their own agenda and solicit support from people through public opinion battle. Professor Kuan, a professor emeritus at the Chinese University of Hong Kong, said Beijing has already succeeded in propagating the notion of “love China, love Hong Kong” among the people as if that was a must for the chief executive.

Frederick Ma names Antony Leung as strong contender for 2017 chief executive race

Former commerce minister Frederick Ma has given a vote of confidence in the chance of former financial secretary Antony Leung if the latter stands for the 2017 chief executive election. Ma, a close friend of Leung, said he hopes people like Leung who are capable and have a heart for Hong Kong would come out in the 2017 contest. Leung did not comment on Ma’s remarks. Legislative Council President Tsang Yok-sing noted that Leung had said privately that he was not interested in joining the contest.


Abe set to move closer to US after snub by ASEAN

Japanese Prime Minister Shinzo Abe has suffered a blow in his attempt to seek support from the Association of Southeast Asian Nations (ASEAN) in a joint opposition against China’s air defense identification zone. The refusal of ASEAN countries to take side in the diplomatic row between China and Japan would prompt Abe to foster closer ties with the United States. The Abe government is also set to speed up the pace of military build-up, which would create more difficulty in ending the deadlock on the China-Japan row.

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