22 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, Feb. 7:


Major shareholders of property developers tap into low share prices

Property counters in Hong Kong have seen their share prices fall to levels that represent an average 46 percent discount to their net asset values over the last eight months, prompting major shareholders to bet more on the shares in a bid to boost their values. Hang Lung Group Ltd. (00010.HK) bought about 100 million shares of Hang Lung Properties Ltd. (00101.HK) for HK$2.55 billion (US$328.63 million), while the Kwok family has added HK$1.07 billion worth of Sun Hung Kai Properties Ltd. (00016.HK) shares. Lee Shau Kee, chairman of Henderson Land Development Co. Ltd. (00012.HK) purchased HK$1.09 billion worth of shares of the developer.

New York State authority probes currency trading manipulation

Benjamin Lawsky, head of the Department of Financial Services in New York State in the US, has asked at least 12 banks for documents related to currency trading, a sign of an extended investigation into alleged manipulation in the cash market that generates a daily average transaction volume of US$5.3 trillion. The banks include Deutsche Bank, Goldman, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered. At least seven authorities worldwide, including the Financial Conduct Authority in the United Kingdom, have been probing the allegations since October last year.

Cheung urges GEM board listing rules revision to help Alibaba

Christopher Cheung, a lawmaker representing brokerage firms and professionals, has urged Hong Kong authorities to amend listing rules for the growth enterprise market board to allow Alibaba Group Holding Ltd. to sell shares in the city using a dual-class regime. The rule amendment could help turn the GEM board into another Nasdaq, it is argued. David Webb, an independent commentator and former independent non-executive director of Hong Kong Exchanges and Clearing Ltd., has however criticized the proposal, saying such move will lower the listing standards in the city.


Government officials seek to mend fences with Heung Yee Kuk

Top Hong Kong government officials showed up at the Lunar New Year reception hosted by the Heung Yee Kuk amid a rift between the rural group and the Leung Chun-ying administration. Acting Chief Executive Carrie Lam led a team of senior officials to the annual reception. Home affairs minister Tsang Tak-shing said they hope to mend fences with the Kuk. National People’s Congress Standing Committee member Rita Fan said relations between the two appeared calm only on the surface as ties were fraught with controversies.

Policy bureau rejects RTHK bid to resubmit new headquarters plan

Head of the government-run Radio Television Hong Kong said yesterday that he would write to the Commerce and Economic Development Bureau for re-submission of a HK$5.3 billion new headquarters plan for the broadcaster to the legislature for approval. The bureau had earlier withdrawn the plan, citing lack of support among lawmakers. It reiterated last night that it would be futile to submit again, adding that the broadcaster should study ways to come up with a practical, feasible plan for it to be built as soon as possible.


Time to rethink punitive stamp duty on property amid US QE exit

A correction in property prices in Hong Kong will accelerate in light of the gradual exit of the United States from its quantitative easing program. In view of that, the government should consider revising the extreme measure of curbing prices through punitive stamp duty. Even if the taxes are to be kept unchanged, the schedule should be revised for it to be introduced in phases. One option is to drop the double stamp duty for local residents who purchase second flats. This will help restore the healthy self-adjustment mechanism of property prices.

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