Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Monday, March 17:
Alibaba Group confirms launch of US listing procedures
Alibaba Group Holding Ltd. has decided to begin the process for a listing in the United States, the company said in a statement Sunday. It said it will consider selling shares in China sometime in the future after the US listing. Analysts expect the group to raise at least US$15 billion from the US listing. The share sale may prompt Hong Kong Exchanges and Clearing Ltd. (HKEx) to hasten its review on the listing requirements with regard to dual-class shareholding structure, an issue that led the Chinese e-commerce giant to choose New York over Hong Kong for its listing venue. HKEx chief Charles Li said Hong Kong has to reform its listing rules to adapt to the economic change in the mainland, even though he is proud of the city’s devotion to its principle.
Two big Macau betting brokers mull backdoor listings in Hong Kong
Two major Macau betting intermediaries are said to be looking for potential shell companies or share sales to listed enterprises for “backdoor” listings in Hong Kong, sources said. The betting brokers are Hengsheng Group and David Group, which are qualified to engage in VIP intermediaries services in premises of all six biggest casino operators in the city. Market observers said existing shell companies are valued in the range of HK$100 million (US$12.88 million) to a few hundred million Hong Kong dollars. Backdoor listings can help those brokers circumvent necessary due diligence process for an initial public offering that may involve giving out confidential information on their VIP business.
Government to solicit views on tax exemption for PE funds
The Hong Kong government is said to launch a public consultation this week on extending tax exemption policy for offshore funds to private-equity funds while allowing asset management firms to operate in the form of open-ended investment companies under the Securities and Futures Ordinance, sources told HKEJ. The proposal requires those beneficiaries of tax exemption to be authorized by, and be under the oversight of, the Securities and Futures Commission. Market players, however, are concerned that the new rules, once passed, will result in a tightened grip over private-equity funds.
Martin Lee urges Democrats to think twice about Shanghai trip
Founding chairman of the Democratic Party, Martin Lee Chu-ming, has urged colleagues to think carefully about the invitation by the central government for all legislators to hold talks on political reform during a visit to Shanghai next month. Lee said past experience does not bode well for such trip, and cautioned the Democrats against falling into the trap again. The two previous similar trips — to Guangdong in 2005 and Shanghai in 2010 — on the eve of political reform debate have proved to be futile in fighting for democracy, he said.
Maria Tam dismisses civil nomination idea as ‘amoeba’
Two pro-government politicians have stepped up attack against the proposal for civil nomination for the 2017 chief executive election. Basic Law Committee member Maria Tam has dismissed the proposal made by the pan-democrats as “amoeba”, saying that it was always different every time democrats talked about it. Executive Council member Cheung Chi-kong said the proposal was unlawful, infeasible and unnecessary. He urged people not to waste time in discussing the idea.
Deeper market reform on renminbi needed
China’s central bank further loosened the trading limits of its currency. The move will be conducive to increase the two-way fluctuation of the renminbi’s exchange rate and the process of internationalization. The effectiveness of the reform hinges upon whether market force plays a role in determining the exchange rate. Therefore, it is more important for China to increase the variety of its foreign exchange products to boost the market.
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