Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Tuesday, Jan. 7:
Singapore Oversea-Chinese Banking Corp seeks to acquire Wing Hang
Wing Hang Bank Ltd. (00302.HK) has entered into an exclusive agreement with Oversea-Chinese Banking Corp. Ltd. on a possible takeover of the Hong Kong family-controlled bank by the second-largest lender in Singapore, according to a stock exchange filing. Market sources said the deal may price Wing Hang at about two times its book value, which translates to HK$41 billion (US$5.29 billion) or HK$132.78 a share. The agreement is not binding and the parties will have to seek approval from both the Monetary Authority of Singapore and the Hong Kong Monetary Authority, the filing said.
Developers urged to stop using discounted prices as marketing ploy
The Sales of First-hand Residential Properties Authority has urged developers to stop using average discounted selling prices as a marketing tactic as it may mislead buyers. The authority’s director Eugene Fung said developers should instead base their promotional strategies on a price range, adding that the practice of soliciting buyers before the price list of a residential project is released should also be stopped. The remarks came as the authority reviewed industry practices eight months into the adoption new regulations. So far, five complaints over a total of 29 are considered serious and may constitute a breach of the rules, possibly resulting in prosecutions, Fung said.
ECONOMY AND BUSINESS
Foreign banks to increase mainland presence amid market reforms
The market share of foreign banks in the mainland is expected to increase to 4 percent in 2016 amid rising interest in tapping into the internationalization of the renminbi and financial market reforms, said Kelvin Leung, banking and capital markets leader, financial services at Ernst & Young Greater China. Leung said the key to a bigger presence of foreign banks will hinge on the liberalization of interest rates, while the establishment of the Shanghai free-trade pilot zone will also benefit foreign lenders in expanding in the country. Foreign banks only had a 1.82 percent share of the market in 2012, according to the consulting firm’s survey.
Hong Kong Television Network seeks judicial review on free-TV license
Hong Kong Television Network Ltd. (01137.HK) has filed an application for leave to apply for judicial review of the decision of the Chief Executive in Council in October 2013 rejecting the company’s application for a domestic free television broadcast license in Hong Kong. Meanwhile, the company said its acquisition of China Mobile Hong Kong Corp. Ltd. was completed in December last year and the company does not expect any changes to the deal despite a move by China Mobile Communications Corp. to launch an internal investigation into the share transaction.
FSDC to maintain govt funding before 2016, Cha says
The Financial Services Development Council of Hong Kong will maintain its existing financial structure to obtain annual funding from the Financial Services and the Treasury Bureau, before a review in 2015 which may affect the source of its funds starting 2016, the council’s chairperson Laura Cha told lawmakers in a committee meeting at the Legislative Council on Monday. A motion to change the name of the financial advisory body to “Financial Services Development Commission” was rejected in the meeting by vote.
Removal of Ming Pao chief editor sparks fears of policy change
The editorial staff of Ming Pao newspaper and the Hong Kong Journalists Association expressed fears over the sudden replacement of the paper’s chief editor Kevin Lau by a Malaysian. They said they are worried the move would usher in a major change in the paper’s editorial policy. Academics also said the personnel change was unusual. Ming Pao said in a statement Lau would be given a new role in exploring new business, but did not elaborate.
Pan-democrats assail government consultation paper on political reform
The Civic Party and the group Hong Kong 2020 led by Anson Chan have criticized the government’s consultation paper on political reform for its failure to reaffirm legal principles of universal suffrage. They lambasted the government for accepting views expressed by mainland officials as principles of law in the discussion on the city’s universal suffrage system for the 2017 chief executive election. They called on people not to be misled by the government.
Market liberalization holds key to avoiding shadow banking risks
China’s regulators have moved to tighten supervision over shadow banks after the completion of a nationwide review of local government debts. Since shadow banking remains in demand in the mainland, intensified supervision would not solve the problem of the risks posed by local debts at their roots. China should instead strive to improve the regulatory system to let market forces help remove distortions in the financial market.
Leung’s failure to govern with even-handedness his ‘biggest mistake’, Lam says
The biggest mistake made by Chief Executive Leung Chun-ying is that he has failed to govern with even-handedness, HKEJ founder Lam Hang-chi wrote. Lam said people felt angry and disappointed that Leung had tried to “install” patriotic groups to counter dissenting voices and civil groups in the city. By doing so, Lam said Leung has worsened social schism, undermined harmony and undermined rational discussion.
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