14 November 2018

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 Wednesday, Jan. 15:


Robust market sentiment set to boost newly listed shares

Miko International Holdings Ltd. (01247.HK) may see its share price surge over 50 percent to as much as HK$3.5 (45.14 US cents) on its debut Wednesday amid favorable sentiment in the Hong Kong stock market, potentially making it the most profitable new listing for investors, according to grey market platforms operated by Bright Smart Securities & Commodities Group Ltd. and Phillip Securities Group. The mainland-based kids’ apparel producer has priced its offer at HK$2.28 a share. Nanjing Sinolife United Co. Ltd. (03332.HK), another company due to debut Wednesday, has also benefited from the buoyant market, posting over 30 percent rise in its share price in the grey market Tuesday.

Lee Kee taps into new metal trading opportunities by joining LME

Interview: Lee Kee Holdings Ltd. (00637.HK) has become the first metal producer in the Greater China region to join the London Metal Exchange as a ring member and an associate trade member, setting the stage for the company to match with international rivals such as Rio Tinto, BHP Billiton, Vale SA (06210.HK; 06230.HK), Glencore Xstrata Plc. (00805.HK), said vice chairman and chief executive Chan Yuen-shan. The company is eyeing opportunities in transacting futures contracts in Asian time zone that the metals bourse may bring after it was acquired by Hong Kong Exchanges and Clearing Ltd. a year ago.


Hong Kong remains No. 1 in global economic freedom ranking

Hong Kong has secured the top spot as the freest economic entity in the world for 20 years in a row, leading Singapore by just 0.7 point in total score, according to a review undertaken jointly by the Heritage Foundation and the Wall Street Journal. The foundation, however, warned of worsening picture in the city’s integrity level as its ranking in the segment further slid to the thirteenth spot this year. Meanwhile, China was ranked 137, a spot that reflects the country should step up efforts in market opening despite the establishment of the Shanghai free-trade pilot zone, the foundation said.

Hong Kong Monetary Authority tightens grip over personal loans

The Hong Kong Monetary Authority has imposed a set of measures to curb potential risks in the personal loan market. The measures include requirements of pressure tests on existing lending agreements, to ensure that a rise in interest rates will not put unbearable pressure on households. The de facto central bank warned that the ratio of total household debt to the gross domestic product in Hong Kong has risen to a worrying level of 61.2 percent from a post-financial crisis level of 57.4 percent in 2007, and that the debt level may further deteriorate as the economy slows.

Up to 70 percent of peer to peer online lenders may exit market, Gibb says

Interview: About 50 to 70 percent of existing peer to peer lenders online are likely to be squeezed out from the market in 12 to 18 months, given the lack of proper risk management system, said Gregory Gibb, chairman and chief executive officer at Shanghai Lujiazui International Financial Asset Exchange Co. Ltd. (Lufax), a subsidiary of Ping An Insurance (Group) Co. of China (02318.HK). The market size, however, may top 100 billion yuan (US$16.55 billion) this year, compared to about 50 billion to 70 billion yuan previously, helping the market grasp a bigger portion of unsecured lending businesses in the mainland with its share rising to 10 to 15 percent from 7 to 8 percent.


Leung tipped to back down over mandatory provident fund plan

Chief Executive Leung Chun-ying is expected to drop the idea of withdrawing the accrued benefits in the Mandatory Provident Fund scheme in the face of fierce opposition from the business sector. Labor unionists said Leung would fail to honor the promise on a review or gradual withdrawal of accrued benefits if he bows to pressure from the business sector. Various sources said the policy address, scheduled for delivery at the Legislative Council on Wednesday, would focus on five areas. They are elderly welfare, anti-poverty, youth, employment and environmental protection.

Post-handover governments hit snag in legislative work, survey finds

The post-1997 governments in Hong Kong have done poorly in their legislative programs, a survey conducted by independent think-tank SynergyNet has found. The first two administrations under Tung Chee-hwa and Donald Tsang have had an average successful rate of 56 percent in their legislative work. It fell to 45.8 percent in the Leung administration, which started in July 2012. SynergyNet urged the government to form coalition with major political parties in the legislature to help ensure effective governance.


All eyes on Leung’s second policy address

There is no denying that Hong Kong Chief Executive Leung Chun-ying faces a difficult situation in governance. On the livelihood front, he is caught between the unionists and the business sector over the accrued benefits of the mandatory provident fund scheme. Conflict over political reform has also grown sharper. The way to ease the conflict is to strike a reasonable balance between various interests and strike an appropriate compromise. Pragmatism is the way to end conundrum. It remains to be seen whether Leung’s policy address today will mark the first step to salvage public confidence.


Beijing cannot ignore strong, clear voice of Hong Kong people, Wong says

Hong Kong people should uphold their core values including rule of law and freedom of speech amid signs of growing interference by the central government and failure of Chief Executive Leung Chun-ying to defend the city’s values, former civil service minister Joseph Wong wrote. Beijing cannot ignore the voices of people on issues such as political reform if they give a strong and clear voice.

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