21 January 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 Friday, Jan. 3:


Gold rush in mainland unlikely to sustain

A gold rush similar to the one seen in April last year is unlikely to repeat its course this year in the mainland, as the country’s economic strength can hardly sustain such a phenomenon in the long run and the price of the precious metal is expected to see strong support at the US$1,180 per ounce level, analysts said. Reports of a gold-buying spree in the mainland over the New Year holiday fueled a surge in the metal’s price in New York to over US$1,200. A department store chain is said to have recorded 200 million yuan (US$33.05 million) of sales in the metal at its 17 branches in Beijing on the New Year Day, mainland media reported.

Hong Kong November retail sales rise 8.5 percent, topping forecasts

Retail sales in Hong Kong climbed 8.5 percent in November from a year ago to HK$39.6 billion (US$5.11 billion), partly driven by the launch of Apple Inc.’s iPad Air. The growth topped market forecasts for a 5.5 percent rise and the 6.3 percent expansion recorded in October. The launch of Apple’s new gadget has boosted unclassified durable goods to post a 62.7 percent surge in sales during the period, compared with 14 percent growth rate a month earlier. Veterans in the retail sector estimated that the industry will see total sales increase at a low double-digit rate this year.


Roma Group share price doubles amid purported wrong instruction

A purported wrong instruction entry by a brokerage firm has sent the share price of Roma Group Ltd. (08072.HK) to HK$6, more than double its Wednesday closing price, at one point on Thursday. Sources said the wrong instruction was made at a huge premium to the bidding range at the time from a buy side that should have been cross-checked by the trader and a senior ranked executive. The incident came just a day after the Securities and Futures Commission imposed a stricter regulatory regime over electronic transaction systems in the city, allowing the watchdog to hold brokerages liable on the stability of their systems.

Alibaba currency fund size grows to be largest in mainland

The outstanding amount under the currency fund in Yu’E Bao, a service provided by Alibaba Group Holding Ltd. to its Alipay clients who opt to hold their payment account balance in the fund to earn higher yields, has topped 185.3 billion yuan as of the end of 2013. The fund, which was launched in June last year, is now the largest single fund in the mainland in terms of assets under management, challenging investment services provided by traditional banks. The fund currently has 43.03 million subscribers.

PBoC official urges central banks to tackle bitcoin

Central banks around the world should improve management of liquidity, money supply and price stability as part of efforts to cope with the prevalence of bitcoin, which has come into existence amid public fears of inflation, a senior official at the People’s Bank of China wrote in an academic journal. The article rejected any possibility of turning the bitcoin into an authentic currency given its limited supply and lack of central controlling system, which pose potential risks to the economy.


Legco chief to help conduct studies on policy think-tank in Hong Kong

Interview: Legislative Council President Tsang Yok-sing has revealed that he was helping people to commission studies for the establishment of a “sustainable” think-tank in Hong Kong. He said he hopes to publicize results of the studies for public discussion within a few months. He said the social conflicts facing Hong Kong after the handover were no longer the same as those confronted by the British colonial government. Tsang has lamented that the post-handover government has not conducted in-depth policy research and studies.

Mainland media blasts intruders into PLA barrack in Hong Kong

China’s official media have stepped up attack against four Hong Kong people who were arrested by police for breaking into the barracks of the People’s Liberation Army in the Admiralty district on Boxing Day. In an editorial, the Global Times praised the police for acting tough against the people. Citing the ongoing political reform debate in the city, it said political disputes should be resolved through lawful channels, adding advocacy for “Hong Kong independence” was a joke. Chief Secretary Carrie Lam has blasted people for political incitement. She pledged to handle the case in accordance with the law.


Resumption of IPOs good for investors in long run

China has cleared altogether 11 firms for initial public offerings in the past two days. A total of 80 firms are expected to be approved, putting pressure on the A-share market in the short run. But in the long run, the resumption of IPOs should help strengthen the fund-raising function of A-share markets by eliminating the bad companies and keeping the good firms in stock market. The key to boosting investor confidence in the market hinges on whether regulators can abandon habitual intervention, uphold order and let market forces determine the allocation of financial resources.


Eight reasons why Beijing is sincere about Hong Kong democracy, Niu says

There are eight facts of argument that could demonstrate Beijing is fully committed to the democratic development of Hong Kong, Niu Gan {牛耕} wrote. They include putting in the Basic Law the ultimate goal of universal suffrage, which was not contained in the Sino-British Joint Declaration. The gradual expansion of democratic elections arrangements after 1997 had also not been introduced by Britain before the handover. Unlike the opposition force in Hong Kong, Beijing wants to have a chief executive in the city who is capable of running the city and able to communicate well with the central government.

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