17 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 Monday, Feb. 10:


Time ripe to bottom-fish for H shares
Interview: Shifts in the market are offering a good chance for investors to bottom-fish for the stocks of some Hong Kong-listed mainland companies, according to Howard Wang, managing director and head of Greater China at JF Asset Management Ltd. Some of the best picks among the low valuations are in insurance, alternative energy and state-backed enterprises, Wang said, adding that H shares could rise about 20 percent on average this year. But he warned that internet and technology counters are likely to be sold off when Alibaba Group Holding Ltd. finally launches its share sales plan in the city and investors look to cash in their profits.

Rolls-Royce to add five mainland showrooms
Interview: Rolls-Royce Holdings Plc. is planning to expand its presence on the mainland, particularly in the country’s west, said Dan Balmer, general manager for Asia-Pacific sales and marketing. The company will work with wholesalers to open five more showrooms in the country, Balmer said, adding that mainland sales rose 11 percent last year, boosting Asia’s share of the company’s revenue to 39 percent.

RMB may be 5 years from free convertibility, HSBC’s Wong says
Interview: The central government is likely to let the yuan to be virtually freely convertible in five years and only retain control of some large capital account transactions, said Peter Wong, HSBC Holdings Plc (00005.HK) managing director and The Hongkong and Shanghai Banking Corp. Ltd. chief executive. Wong expects the authority to soon loosen limits on interest rates of yuan savings, and said Hong Kong must speed up related product development to keep its competitive edge.


Tsang signals beginning of the end to one-off sweeteners
The one-off handouts distributed by the Hong Kong government over the last few years will be phased out now that external economic conditions have stabilized, Financial Secretary John Tsang said. Tsang said in his blog yesterday that the beginning of the end to the relief measures should “arrive very soon”, but he also defended the “countercyclical” fiscal measures adopted since 2008 to ease the pain caused by the global economic turmoil.

HK firms draft backup plans for Occupy Central
Several major corporations have prepared contingency plans for possible disruption to operations brought on by the pro-democracy Occupy Central activities tentatively planned for early next year, according to an HKEJ investigation. Property giants Hang Lung and New World Development are considering plans for second offices outside Central. Christopher Cheung, a legislator representing the financial services sector, warned that any interruption to Hong Kong stock exchange operations could result in losses of up to HK$10 billion in transactions per hour.


Fed tapering pace hinges on inflation 
The United States is likely to adjust the pace of Fed tapering depending on US inflation. This will be to ward off any deflation that could deal a blow to the overall economy and further hurt the job market. New Fed chief Janet Yellen, who will present her strategies at a two-day US Congress hearing on Tuesday, will have to work out how the Fed can use the slight inflationary environment as a catalyst for growth.

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