Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Wednesday, Feb. 5:
Capital outflow trend may spread outside emerging markets, Chan warns
The trend of capital outflow in emerging markets may spread elsewhere amid the US Fed tapering that is likely to affect the stability of interest rates and exchange rates in other regions, Hong Kong’s Secretary for Financial Services and the Treasury, Chan Ka-keung, warned. Investors should pay attention to those factors despite good fundamentals of the city’s economy, Chan said. He expects the market to face various challenges and volatility in the coming year.
Generic reduction in transaction levy costs HK$52.38 million a year, Tong says
Interview: Reducing levy on securities transactions, though a mere gesture in response to market demand, will cost the watchdog HK$52.38 million (US$6.75 million) each year, said Carson Tong, chairman of Hong Kong’s Securities and Futures Commission. The government agency will lower the transaction levy to 0.0027 percent from 0.003 percent starting October despite a budget deficit that is expected to widen to HK$508.68 million from HK$300.71 million in the coming year. Tong said, however, that efforts to step up oversight of the more diversified businesses of the bourse operator Hong Kong Exchanges and Clearing Ltd. (00388.HK) will not be affected.
PBoC may relax renminbi daily exchange bandwidth in March
Interview: The People’s Bank of China may expand the daily bandwidth of the exchange rate of the renminbi in March when top leaders are due to meet at the National People’s Congress and the Chinese People’s Political Consultative Conference, said ABCI Securities managing director and co-head of research Banny Lam. The bandwidth should ideally be extended to 3 to 5 percent from the current 1 percent, Lam noted. He also expects the central bank to hasten its pace in the liberalization of deposit interest rates in the first half this year.
Former senior official not optimistic about political reform talk
A former senior Hong Kong government official has said that differences over the city’s political reform are widening. Lau Siu-kai, former head of the Central Policy Unit, said he is not optimistic about a consensus over electoral arrangements for the 2017 chief executive election. Lau said in an RTHK interview that the government was caught in a dilemma over the demand for civil nomination by pan-democrats as Beijing was clearly opposed to it. To rule out the idea at this stage would make a mockery of the government’s pledge to listen to the people during the consultation, Lau said.
Land premium arbitration proposal be suspended for consultation, watchdog says
A watchdog over land and housing policy in Hong Kong has called for a halt of the plan to set up an arbitration mechanism for the government and property developers over land premium announced by the Chief Executive in his January policy address. The group, headed by former legislator Lee Wing-tat, said the plan would make the existing land premium for change of land use obsolete. They claimed it would give advantage to developers ultimately, calling for the idea to be suspended for more public consultation.
A case for cautious optimism for world economy in 2014
An air of pessimism has engulfed world markets amid signs of slowing factory activities in the United States and China and capital outflows in emerging economies. All eyes will now be on the latest US employment data scheduled for release on Friday and the policy of new Federal Reserve chairwoman Jane Yellen. In China, the risk of shadow banking will continue to haunt the minds of investors as bolder reforms are in the pipeline in 2014. For emerging economies, their ability to survive the global market fluctuations hinges on their policy initiatives. That said, there is room for cautious optimism overall for 2014 amid a gradual warming of the world economy.
Room for press freedom shrinking, Lam warns
Although the laws and systems in Hong Kong remain largely unchanged after 1997, the room for freedom of the press and some related areas is shrinking, HJEJ founder Lam Hang-chi wrote. There are more and more people, including newspaper proprietors, who have sought to “manipulate news”. Lam also pointed the finger at some media outlets who “fabricated news with malicious motives” under the disguise of seeking justice, without giving names. The central government’s Liaison Office has also attempted to interfere with the work of journalists. Doing so, he said, has dealt a blow to free press. Lam attributed the “suffocating” media scene to the failure of various parties to do their job rightly and to respect social rules and norms.
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