Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Thursday, Dec. 19:
Hong Kong government seeks to sell 13 land plots next quarter
The Hong Kong government is putting 13 land parcels for tender in the first quarter next year, with 12 of the sites earmarked for residential purposes for targeted supply of 5,500 home units. The sites are mainly located in Shatin, Tin Shui Wai and Tai Po. The proposal would send the number of new home supply under land sites sold in the fiscal year ending March to 14,400, marking a new high since 2000. However, the number still lags behind the government goal of 20,000 units a year. Authorities said achievement of the target would largely depend on MTR Corp’s (00066.HK) project pipeline.
High issuance fees dampens Hong Kong’s position in warrant market
Hong Kong has been losing ground in the structured product market in terms of the number of issuances, although the transaction value still puts it in the top league in the world, said Standard Chartered Securities (Hong Kong) director Yung Sai-kuen. The fee levels of warrant issuance have surpassed hedging costs in the city, Yung said, adding that the high costs have led to the number of issuances in Hong Kong to fall behind that in Taiwan. According to the bank, a total of HK$2.9 trillion (US$374.07 billion) worth of transactions have been recorded in Hong Kong from January through the end of November, with a combined 6,391 warrants issued, compared to 8,095 units in Taiwan.
ECONOMY AND BUSINESS
Through-train to HK stocks tipped to set off in mainland next year
Interview: Chen Li, head of China equity strategy at UBS AG, believes that mainland authorities will launch the long-awaited qualified domestic investor scheme for individuals in the first half next year, boosting direct outbound investment by retail investors. The so-called “through-train” to the Hong Kong stock market may open a door for mainland authorities to expand channels for overseas funds investing into the country as a two-way measure, sending the benchmark Shanghai Shenzhen CSI 300 Index to 2,750 points, up 12 percent from the current level.
Qianhai pilot zone secures over 3,000 company registrations
More than 3,000 firms have registered in the Qianhai economic pilot zone in Shenzhen, the management authority said. Thirty corporations among the Fortune 500 are on the list, while Hong Kong firms comprise 150 of the total number. Some 1,600 firms have become members of the Qianhai Equity Exchange. The zone, which is planning to impose a legal system more aligned to jurisdictions adopting common laws with one third of the juries being Hong Kong citizens, has also attracted about 900 private-equity firms and 100 financial leasing companies.
China Mobile plans to sell 100 million 4G phones next year
China Mobile Ltd. (00941.HK) plans to sell 100 million 4G handsets next year, on top of a similar volume of 3G phones. It will hasten the construction of 4G network. Half of the sales target for 4G phones is likely to come without contract bundle, the management said, adding that 200 models compatible with TD system are planned to be put on shelves in the period. The telecommunications carrier, however, has yet to unveil its marketing plan for iPhone 5s.
Xi urges Hong Kong people to have ‘pragmatic discussion’ on political reform
Chinese President Xi Jinping has called on Hong Kong people to seek consensus on the city’s political reform through “pragmatic discussion”. He made the remarks at a meeting with Chief Executive Leung Chun-ping, who was paying his annual duty visit to Beijing. Xi said he hopes the ongoing consultation on political reform could form a solid foundation for universal suffrage for 2017 chief executive election, which should be conducted on the basis of the Basic Law and the relevant National People’s Congress Standing Committee resolutions.
Hong Kong will not seek NPC interpretation on welfare ruling, Yuen says
Hong Kong’s Secretary for Justice Rimsky Yuen said yesterday that the government would not seek interpretation from China’s National People’s Congress over provisions in the Basic Law after the city’s Court of Final Appeal ruled a residency requirement on welfare policy as unconstitutional. Yuen said the government would also not ask the top court to defer execution of the ruling. He added that officials were conducting a comprehensive assessment on the impact of the ruling on welfare policy.
Land sales plan meets housing target, but long-term land supply needed
The Hong Kong government announced the land sales plan for the next quarter, which would boost the total amount of land in the current financial year to provide 13,700 residential flats, similar to the original target. This year’s new land lots were mainly available from a change of use of land originally set aside for other purposes. In the long run, the government should formulate new measures to explore land supply for housing in order to create conditions for the abolition of punitive stamp duty tax on property transactions.
Xi’s growing powers need systemic supervision
The growing power of President Xi Jinping in the three organs – the Communist Party, the government and the military – has become increasingly obvious, veteran China watcher Edgar Yuen wrote. There are merits and demerits of a political system with power vested with one person. The crux of the matter is whether the powers are subject to supervision. Xi has pledged to “lock powers within system”, which shows he would abide by the law. The success hinges on establishing systems to ensure that the powers are effectively regulated.
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