21 March 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. 24:


Chong Hing eyes overseas expansion in the long term

Interview: Chong Hing Bank Ltd. (01111.HK) may seek to expand overseas through mergers and acquisitions over the long term, said Yuexiu Enterprises Holdings Ltd. chairman Zhang Zhaoxing {張招興}. The Guangzhou government-backed conglomerate plans to first extend the presence of the newly purchased banking subsidiary in mainland China, primarily in Guangdong province, before entering the international market, Zhang said, adding that such an expansion plan will not trigger a rights issue by the bank as stipulated in the terms of acquisition agreed with the Liu family, the former majority shareholder of the lender.

Tokyo Commodity Exchange wins trading license in Hong Kong

The Tokyo Commodity Exchange has obtained a license to provide automated trading services in Hong Kong from the Securities and Futures Commission last week, enabling it to recruit locally authorized brokerage members. The Japanese bourse operator, which runs contracts on fiber, rubber and metals, among other commodities, apparently seeks to attract members from mainland China, considering that it has developed a simplified Chinese version of its website. Market players, however, said their decision on whether to join the network would depend on how well it can meet their trading needs.

Wage hikes, slowing economy prompt migrant workers to return

Rising wages and a slowing economy have prompted migrant workers to return to their positions in urban plants, rather than staying in their rural homes after the Lunar New Year holidays this year, when entrepreneurs usually experience labor shortages, insiders in the manufacturing sector said. The return rate this time came in at about 80 to 90 percent, they said, adding that some of those who returned received as much as 14 percent pay rise. However, companies are still in general facing difficulties in hiring highly skilled workers.


More than 6,000 people join rally for press freedom

More than 6,000 people joined a march organized by the Hong Kong Journalists Association to call for support for freedom of the press and speech and condemn perceived efforts to muzzle the media. The rallyists tied blue ribbons on the gate of the Chief Executive’s Office in Tamar to dramatize their demand. Police said 2,200 people took part at the peak of the rally. A government spokesman reiterated that the Leung administration would and could not interfere with editorial freedom, editorial independence and internal management of media outlets.

Budget sweeteners to be slashed on modest surplus, source says

Faced with a modest surplus of less than HK$14 billion caused by a drop in profit tax, the government will reduce the size of its one-off sweeteners for residents in its 2014/15 Budget. The total amount of one-off relief measures will be downsized from HK$33 billion to HK$20 billion. Electricity tariff subsidies will be abolished. A two-month rental waiver for public housing residents will be cut to one month. But to ease discontent of the middle class, a 75 percent rebate of salaries tax capped at HK$10,000 is likely to be retained.


Emerging economies must stand on own feet to survive US tapering shockwaves

The just-concluded Group of 20 meeting in Sydney has not discussed in detail the problem of external shock caused by the United States’ gradual exit from its quantitative easing program. It shows developed economies are still inclined to give priority to their own interests in shaping the agenda and results of the G20 meeting. It became clear the US will not adjust the pace of it tapering in view of the financial upheavals in emerging economies. The developing countries will have to make their own effort to tackle problems including national debt and political instability instead of hoping for a helping hand from developed nations.

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