Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Tuesday, March 11:
Hong Kong, mainland stock markets seen weak near term
Hong Kong and mainland stock markets are expected to show further weakness in the short run amid concerns over the Chinese economy, analysts said after the markets tumbled Monday on disappointing Chinese exports data and a depreciating renminbi. The Shanghai Stock Exchange Composite Index and the Shenzhen Stock Exchange Component Index both slid 2.9 percent, while Hong Kong’s Hang Seng Index dropped 395 points to close at 22,264 points. China’s exports slumped 18.1 percent on year in February, the biggest decline since August 2009, while a drop in Producer Price Index widened to 2 percent.
Orient Overseas expects further headwinds in shipping industry
Orient Overseas International Ltd. (00316.HK) sees oversupply continuing to weigh on the shipping industry in the coming two years as several new ships are slated for delivery in the period. The timing of the recovery of the sector is still uncertain, with freight rates remaining under pressure, the company said. The remark came despite a turnaround in the company’s financial performance during the course of 2013. It posted a full-year profit of US$47.04 million after making a loss in the first half amid a drag on fares for Asian routes given slower demand from China.
Tencent taps Jingdong Mall in US$215 million deal
Tencent Holdings Ltd. (00700.HK) has unveiled a US$215 million plan to buy a 15 percent stake in the country’s second largest e-commerce platform JD.com, also known as Jingdong Mall or formerly 360Buy. Tencent will inject its online shopping and bidding vehicles, among others, to JD. The move came after it bought a stake in China South City Holdings Ltd. (01668.HK) for collaboration in commerce and logistics businesses. Analysts expect the latest deal to enhance Tencent’s profits and cash flows.
Justice chief backs candidates with diverse views contesting top post ‘in theory’
Interview: Hong Kong Justice Secretary Rimsky Yuen said yesterday that candidates representing different political viewpoints should be allowed to contest the universal suffrage for the 2017 chief executive election from an “objective, theoretical” point of view. He admitted there were still major differences over the electoral arrangements, but said that “there is absolutely no room for optimism”. Yuen said he could not predict whether the government proposed electoral blueprint would be challenged in courts. But if that happens, he said it might not be a “bad thing”.
Consultant involved in TV license row plans to sue company
A consultant who accused the Hong Kong government of misquoting the assessment of her former firm, Value Partners Asia, of the television market during the row over free-to-air TV licenses last year plans to take the company to court. Former managing partner Jenny Ng Pui-ying told HKEJ that she is seeking compensation of more than HK$10 million for unfair dismissal by the company. She said she was sacked by the company after she told the media she planned to resign.
Foreign firms take dim view on Japanese stocks
Japan yesterday revised downward its gross domestic product growth for 2013 to 1.5 percent and unveiled a bigger trade deficit for January. The figures show the economic policy spearheaded by Prime Minister Shinzo Abe, or Abenomics, is losing its vigor. The effect of currency depreciation in boosting exports has been weakening. Enterprises have become more hesitant in raising salaries in face of rising costs. Support for Abe’s plan to raise consumption tax has become weak. With foreign firms cutting their holdings in Japanese stocks for two consecutive months, it sends a clear alarm signal to investors.
Kunming terrorist attack raises alarm bell on ethnic minorities policy
The recent terrorist attack in Kunming is a clear sign the pro-independence activists of Xinjiang separatists have intensified, Stanford University researcher Shi Litai wrote. A mixed strategy of both soft and hard tactics is still the best way to cope with the challenge. Unemployment among young Uyghur in the Xinjiang region has stayed at a high level, constituting a major element of political unrest in the region and across the nation. The Chinese government should not blindly pursue GDP growth. Such economic strategy has only benefited a small group of people with vested interests, but not the disadvantaged minority among the Han Chinese, let alone the Xinjiang ethnic minorities.
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