Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Wednesday, Dec. 18:
Consultation on REITs market reform welcome, Strong says
The Financial Services Development Council of Hong Kong welcomes the city’s securities watchdog to undertake a public consultation on the regulatory reform of real estate investment trusts, said council member William Strong, who is also co-chief executive for the Asia-Pacific region at Morgan Stanley Group Inc. Securities and Futures Commission chief executive Ashley Alder revealed last week that the agency is planning a consultation next year over the regulatory framework of REITs that has been in use for a decade. Strong said only by removing the technical obstacles, such as investment restrictions, can a cluster effect exist in the market to help it compete with Singapore, which has a competitive edge over Hong Kong in the issuance of commercial trusts.
Medical plays may thrive next year on the stock market, Cho says
Bio-technology and medical counters are likely to outperform other stocks in the coming year, said HKEJ chief consultant Cho Chi-ming. Given an aging population in China, the healthcare sector “is another dream” in the long run, he said. Meanwhile, the days of getting rich by investing in banks have passed, Cho said. He said property firms as well as technology and internet-related companies are facing increasing risks.
ECONOMY AND BUSINESS
Hong Kong third runway commercial site development plan goes ahead
The Airport Authority of Hong Kong has decided unanimously to stick to its original plan to locate both a designated hotel and a maintenance plant for airport express trains in the northern commercial area, keeping the entirety of the operating system of the city’s third runway on top priority. The decision came after director Vincent Lo made a turn on his stance and ended a month of standstill on the issue concerning environmental impact and fire safety. Chairman Marvin Cheung believes the new development will help the city seize opportunities stemming from the Hong Kong-Zhuhai-Macau Bridge.
Bohai Commodity Exchange to provide RMB cross-border trade settlement services
The Bohai Commodity Exchange in Tianjin has teamed up with Bank of China Ltd. (03988.HK) to become the first non-bank financial institution to provide renminbi cross-border trade settlement to clients in the mainland. The exchange kicked off a roadshow in Hong Kong Tuesday, promoting such settlement services in the trade of iron ore and natural rubber. The cooperation is aimed to help the country gain bargaining power in setting prices of commodities at the international level.
Hong Kong exports expected to grow 5.5 percent next year
Improving economic prospects of the United States and Europe are expected to help Hong Kong’s exports grow 5.5 percent next year, said Nicholas Kwan, research director at the Hong Kong Trade Development Council. The anticipated higher growth in exports, which compares to this year’s forecast of about 3.5 percent, is likely to boost the overall economy in the city. Kwan suggested that local exporters should seek direct supply to retailers overseas in a bid to be more competitive in pricing.
Beijing keen to see universal suffrage for 2017 chief executive election, NPC chief says
Chinese National People’s Congress chairman Zhang Dejiang has reiterated that Beijing is very keen to see the introduction of universal suffrage for the 2017 chief executive election in Hong Kong. Zhang made the remarks at a meeting with the Chief Executive Leung Chun-ying, who was paying his annual duty visit to Beijing. At a separate meeting yesterday, Premier Li Keqiang told Leung that Beijing will give full support to Leung and his government. Leung is scheduled to meet with President Xi Jinping on Thursday.
Communications body proposes regulations for TV commentary programs
The independent Communications Authority yesterday published a consultation paper on the regulation of commentary television programs in the wake of a controversy over an ATV program during the public uproar over national education curriculum last year. ATV ran a five-part daily commentary that was critical of the student-led campaign. Among the proposed rules, broadcasters will be required to stipulate clearly that the programs only represent their views. The broadcaster should also provide a platform for viewers to respond.
Leung suffers a blow in airport depot plan
The Hong Kong Airport Authority board has voted against a change of the depot plan at the third runway to avoid a delay of the project. The board agreed to revise the plan to build commercial facilities while keeping the driverless electric rail yard underneath as originally planned. The decision has dealt a blow to Chief Executive Leung Chun-ying, who was keen to build massive commercial facilities as part of efforts to foster closer integration with the mainland. It reflects the enormous difficulty of Leung in his governance and the need for the administration to show sincerity and improve its communication skills to push through its policies.
Keeping milk powder curbs leaves a bad name for Hong Kong
The Hong Kong government should publicize the results of a pressure test on the supply of infant formula conducted in October and give detailed explanation of its curbs on the number of milk powder cans outbound visitors can carry, former civil service minister Joseph Wong wrote. Macau has imposed requirement on infant formula suppliers to ensure adequate supply for local mothers. The Hong Kong government should explain why the arrangement cannot be copied in the city. The preservation of the curbs has become an example of the poor governance of Hong Kong.
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