Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Wednesday, Jan. 8:
TVB to stop leasing transmitters to Wong’s HKTV unit
Television Broadcasts Ltd. (TVB, 00511.HK) will pull back the leases of six transmitting stations to China Mobile Hong Kong Corp. Ltd., a unit that has been taken over by Hong Kong Television Network Ltd. (HKTV, 01137.HK) in December last year. TVB said in a statement it made the decision because China Mobile Communications Corp. is undertaking an internal investigation into the transaction. The termination of the lease agreement, which is viewed as another blow to HKTV chairman Ricky Wong’s free-TV broadcasting plan, will take effect on July 6. Sources said Wong had anticipated TVB’s move and had already come up with plans to counter the move.
Competition with mainland brands, Apple weighs on Samsung profits
The rise of Chinese handset brands and fierce competition with Apple Inc. have contributed to a decline in the earnings of Samsung Electronics Co. Ltd. for the three months to December, the first drop in 27 months, analysts said. The Korean cellphone maker said it estimated its profit in the last quarter dropped 6 percent from a year earlier, or 18 percent from the previous quarter, to 8.3 trillion South Korean won (US$7.76 billion). Sales of its Samsung Galaxy series have slowed as low-priced mainland handsets flooded the market and Apple launched its iPhone 5s and 5c, the analysts said. Profits from handset sales constituted about two thirds of Samsung’s overall earnings.
ECONOMY and BUSINESS
HK govt holds consultation on ‘too big too fail’ financial firms
The Hong Kong government has launched a three-month consultation on setting standard procedures in resolving crises involving too-big-to-fail or systemically important financial institutions. The consultation draft considers the possibility of compulsory dismantling and sale of insolvent banks by such means as establishment of a bridge institution or converting debts into equity. The government is extending the consultation to later this year as it aims to submit a proposal to lawmakers next year.
Chow Tai Fook same store sales growth slows after gold rush
Chow Tai Fook Jewellery Group Ltd. (01929.HK) said same-store sales in the third fiscal quarter ended December grew by a slower 11 percent following a gold rush in previous quarters, with revenue from accessories made with the precious metal dropping to 57 percent. The contribution ratio, however, is expected to rise again to over 60 percent this quarter, given the expected rise in demand before the Lunar New Year. The company is planning to net-add 200 stores in the coming fiscal year, mainly in mainland China.
Miko International said to be most appealing new stock in over 30 months
Kids’ apparel maker Miko International Holdings Ltd. (01247.HK) has become the most attractive new listing in the Hong Kong initial public offering market in more than two and a half years, with over-subscription of more than 1,125 times, surpassing Oi Wah Pawnshop Credit Holdings Ltd. (01319.HK) which locked up 1,084 times the funds it sought last year, sources said. The apparel maker has frozen HK$42.2 billion (US$5.44 billion) in investor funds and is likely to price its shares at the top of indicative price range at HK$2.32 apiece. Still, Miko’s record falls behind the 1,200 times over-subscription seen by Beijing Enterprises Holdings Ltd. (00392.HK) in 1997.
Leung to announce Chinese medicine hospital plan in second policy address
Chief Executive Leung Chun-ying is expected to announce the setting up of a Chinese medicine hospital in his second policy address, which is scheduled for Wednesday next week. The new hospital will provide out-patient and hospital bed services as well as training for Chinese medicine students. Sources said Leung is also expected to double the annual amount of medical vouchers for the elderly from HK$1,000 to HK$2,000.
Malaysian newspaper veteran editor tipped to head Ming Pao
A former chief editor of the Malaysian Nanyang Siang Pau, Chong Tien-siong, is tipped to become the chief editor of the Chinese-language newspaper Ming Pao, replacing Kevin Lau, whose transfer to head multimedia projects has triggered an uproar among editorial staff. On Tuesday, more than 200 editorial staff issued a joint statement expressing their shock over the decision and demanding a meeting with the management. Ming Pao said in a statement last night that the management plans to meet with senior staff this week. But staff representatives insisted the management should hold a meeting with all employees.
Sir Run Run a role model to follow
Hong Kong’s media mogul Sir Run Run Shaw passed away, putting an end to his extraordinary legendary story and setting a role model of a visionary entrepreneur and kind-hearted philanthropist. He is a firm believer in the idea of promoting science and education to help rejuvenate the nation. Sir Run Run has set up two funds on education and science and technology that have made a combined donation of HK$4.5 billion. His selfless deed is a model act for others to follow.
John Tsang urged to draw from reserves for healthcare, retirement needs
Financial Secretary John Tsang should formulate long-term measures to cope with future demand for healthcare services and retirement protection, former civil service minister Joseph Wong wrote. Wong urged Tsang not to adopt one-off economic relief measures such as cash hand-outs unveiled in previous budgets. The government should set aside HK$100 billion for healthcare services such as training of doctors and another HK$100 billion for retirement protection.
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