Date
11 December 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 Thursday, March 20:

TOP STORIES

Tencent to be watched amid share split proposal, analysts say

Tencent Holdings’ (00700.HK) share split proposal may give limited push to the stock in the short run, analysts said. The multimedia giant has unveiled a plan to break each of its shares into five in a bid to lower the cost per board lot investors have to pay for when buying the shares. Analysts, however, said the long-term prospect of the firm remains robust given its competitive advantage in the industry. The share split is expected to take effect on May 15 after approval by shareholders the previous day.

Alibaba has no backdoor listing plan, says Jack Ma

Alibaba Group Holding Ltd. is not planning on a backdoor listing in Hong Kong through a shell company, said founder and chairman Jack Ma. The remark came as some market players feel such move might be possible after the company opted for a share sale in New York as Hong Kong authorities refused to shake the city’s one share one vote principle. Securities and Futures Commission chairman Carlson Tong, meanwhile, said amending rules for a particular firm will damage market confidence and that it may not be feasible to simply allow Alibaba and other internet firms alike to list in the Growth Enterprise Market.

Manufacturers’ hedging costs seen rising on bigger renminbi swings

Defensive hedges against foreign exchange risks by manufacturers are likely to be more difficult after the daily trading bandwidth of the renminbi was extended, said Eddy Li, president of Hong Kong Economic and Trade Association. A higher flexibility in the currency means an end to a one-way trend in appreciation, although depreciation in the currency can reduce production costs and increase price competitiveness, Li added, noting that the renminbi spot rate has slid at a faster pace after the wider trading band was imposed Monday.

POLITICS

Taiwan occupy legislature protest inspires democracy activists in Hong Kong

Inspired by a students-led occupation of Taiwan’s legislature building over a government plan to bulldoze a cross-strait trade pact for approval, pan-democrats in Hong Kong have warned they might occupy the Legislative Council building if there is no universal suffrage for the 2017 chief executive election. But the Legco secretariat was quick to stress the political culture, rules and procedures of the legislature in Hong Kong were different from Taiwan’s. The legislature is committed to openness, transparency and public accessibility in their meetings, it said.

Beijing wants ’100 percent safe’ universal suffrage system for Hong Kong, Cheng says

A veteran pro-Beijing Hong Kong leader said Beijing is keen to ensure the result of the city’s universal suffrage for the 2017 chief executive election is “100 per cent safe”. Cheng Yiu-tong, a National People’s Congress deputy, claimed Beijing would prefer a system that ensures the chief executive “loves China, loves Hong Kong” and be loyal to the central authorities. He said Beijing’s demands were “natural” because the city was just a region in the country. Occupy Central movement organizer Chan Kin-man said Cheng’s hard-line stance showed Beijing was not sincere in honoring the universal suffrage pledge.

EDITORIAL

Power bills set to rise as Hong Kong changes ‘fuel mix’ for clean air

The launch of consultation yesterday on the ‘fuel mix’ in Hong Kong’s power sector is the curtain-raiser to a review of the scheme of control over the two power companies. The current scheme expires in 2018. Opening up of the market for more competition will be the future trend. As the government has put more emphasis on the merits of the option that features buying more power from the mainland, the preference is clear. From the perspective of livelihood, higher power bills will bring about inflationary chain effects, putting more pressure on low-income families.

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