20 September 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 Tuesday, April 1:


China Merchants Holdings seeks to raise HK$15.43 billion

China Merchants Holdings International Co. Ltd. (00144.HK) is seeking up to HK$15.43 billion (US$1.99 billion) from an issue of mandatory convertible securities on the basis of one unit for every five ordinary shares held, in the company’s first major fundraising attempt in a decade. The issuance price will be set at HK$30.26 apiece, representing a premium of 13.55 percent to the stock’s closing price on Monday. Fifty-five percent of the proceeds will be used to repay debts, the company said in a stock exchange filing. Shareholders can exchange the securities for new shares in three years from the issue date.

Interim receivers appointed to manage Qunxing Paper

A Hong Kong court has appointed, following an application from the Securities and Futures Commission, Fok Hei Yu, John Howard Batchelor and Roderick John Sutton of FTI Consulting (Hong Kong) Ltd. as the interim receivers and managers of Qunxing Paper Holdings Co. Ltd. (03868.HK). The securities watchdog said the application was made to protect shareholders’ interest, as the listed company’s wholly owned subsidiary in Shandong, which is the group’s only unit in operation, has filed for bankruptcy in late February but failed to disclose the event to the public in a March statement as required by the authority.

China Everbright Bank plans preference share issue

Interview: China Everbright Bank Co Ltd (06818.HK) is eyeing an issue of preference shares and other second-tier capital in a bid to maintain compliance with capital adequacy ratio (CAR) requirements, said president Zhao Huan {趙歡}. As of the end of last year, the bank’s tier-one CAR and general CAR stood at 9.11 percent and 10.57 percent, respectively. The lender is also tapping community banking services to attract more deposits, as part of a bigger plan to combat challenge from the liberalization of interest rates in the mainland, Zhao added.


Pan-democrats still undecided on Shanghai visit

Only 44 of the 70 Hong Kong legislators — and just one pan-democrat, radical “Long-Hair ” Leung Kwok-hung — had signed up by the deadline yesterday to join a two-day visit to Shanghai this month, during which a half-day talk with Beijing officials on the city’s political reform will be held. Pan-democrats will meet today to decide on making the trip. They want confirmation by Beijing that an exclusive meeting with mainland officials will be arranged. But Legislative Council President Tsang Yok-sing said he does not expect further replies from Beijing about the democrats’ demand.

Silent Majority academic floats low-threshold nomination bar for 2017 poll

A key member of the Silent Majority, a group that aims to counter the civil disobedience Occupy Central movement, has proposed that any person who could get the support of one-tenth of a nominating committee could become formal candidate for the 2017 chief executive election. The “low threshold model” proposal by Dr Ho Lok-sang, a Lingnan University economist, is broadly similar to a blueprint proposed by the Hong Kong 2020 group headed by former chief secretary Anson Chan. Ho suggested adding 400 district council members to a 1,200-member nominating panel. Chan’s aide Lee Wing-tat said they welcome Ho’s proposal.


Consumption tax hike poses big challenge to Abenomics

Japan raised consumption tax from five percent to eight per cent beginning today. It will pose the biggest challenge to Prime Minister Shinzo Abe’s economic policy, the so-called Abenomics. His structural reform will face more difficulties if the tax hike further slows down economic recovery. The grand plan to revitalize the Japanese economy after a 20 year-long downturn will be in jeopardy.

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