Date
16 October 2017

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 Tuesday, Feb. 11:

TOP STORIES

China tipped to scrap HK yuan daily exchange cap

The daily 20,000 yuan (US$3,300) cap on yuan conversion for individuals in Hong Kong is expected to be scrapped in the first quarter, a time that the mainland authority usually reviews and sets policies, banking veterans told HKEJ. The move is likely to give a big push to the size of the renminbi pool and the development in the city of related products, including bonds, funds and equity-linked notes, they said. The Hong Kong Monetary Authority earlier estimated that renminbi deposits in the city could top 6 trillion yuan by 2028.

Festive luxury sales hit 10-year low as anti-graft campaign bites

Mainland sales of luxury goods slumped 57.8 percent from a year earlier to a decade low of US$350 million during the first week of the Lunar New Year as the central government pushed on with its anti-graft campaign, according to a joint study by the World Luxury Association and the China Council for the Promotion of International Trade.  

Alibaba charts new direction with US$1.14 bln AutoNavi takeover

Alibaba Group Holding Inc. has offered to buy the 72 percent of AutoNavi Software Co. Ltd. (NASDAQ:AMAP) it does not own for US$21 per American depository share, or US$5.25 in cash per ordinary share, AutoNavi said in a filing Monday. Alibaba already holds 28 percent of the digital mapping firm and wants to buy the rest to become more competitive in navigation and mapping, a spokesman said. The deal is also expected to offer synergies in the company’s social networking businesses, Alibaba president Cai Chongxin {蔡崇信} said in an offer letter to AutoNavi.

EDITORIAL

Putin, Abe high-profile meeting no threat to China ties

China and Russia no doubt see mutual economic and military ties as a priority to counter the influence of the US-Japan relationship in the Asia-Pacific region. But Russian President Vladimir Putin’s latest high-profile meeting in Sochi with Japanese Prime Minister Shinzo Abe is unlikely to hurt the Sino-Russian relationship. Rather, it reflects Putin’s ambition to raise his country’s influence on the international stage.

COMMENTS

Managing welfare expenses for generations to come

Financial Secretary John Tsang might have foreseen a wave of government expenditure on welfare for generations to come, political commentator Yu Kam-yin writes. Given the higher education and net wealth of the generation that thrived on the economic boom in Hong Kong in the 1970s and 1980s, government welfare spending is expected to fall. But that is not the case for younger generations. The senior official is due to deliver his budget speech for the coming fiscal year at the end of this month.

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