Date
15 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, April 3:

TOP STORIES

HKEx, Shanghai Stock Exchange in talks on mutual market access

Hong Kong Exchanges and Clearing Ltd. (00388.HK) has been in discussions with its mainland Chinese counterparts regarding the potential establishment of mutual market connectivity initiatives, the bourse operator said on Wednesday after media reports suggested that it has reached consensus with the Shanghai Stock Exchange on related technical arrangements. The 21st Century Business Herald said the bourse operators are setting up a two-way system to gather equities transaction instructions that will enable cross-border market access for individual investors, or the so-called through-train scheme. Observers, however, are concerned that the leak of the news may once again hinder the launch of the scheme as seen in 2007.

China initiates measures to stimulate growth, employment

The central government has pledged to adopt a three-pronged strategy to bolster growth and employment, according to a statement issued after a weekly cabinet meeting chaired by Premier Li Keqiang {李克強}. The strategy includes expansion of tax concession to micro and small enterprises up until 2016, faster reconstruction of temporary housing zones, and increasing the development of railway infrastructure. A total of 6,600 kilometers of railway lines will complete construction this year. An annual investment fund worth 200 billion to 300 billion yuan (US$48.35 billion) will be set up. Economists said the measures should be enough to ensure growth for the short term.

Occupy Central to hit Hongkong Land, Wharf, Great Eagle hardest, UBS says

Hongkong Land Holdings Ltd., Great Eagle Holdings Ltd. (00041.HK) and The Wharf (Holdings) Ltd. (00004.HK) are likely to suffer the most if the Occupy Central movement executes its plan to block streets in the heart of Hong Kong’s commercial district later this year, UBS A.G. said in a research report. The companies may see their revenues fall anywhere between 20 to 50 percent, with net asset value adversely affected, as their investment property portfolios are highly concentrated in the concerned areas. Swire Properties Ltd. (01972.HK), Hysan Development Co. Ltd. (00014.HK) and The Link Real Estate Investment Trust (00823.HK), meanwhile, will be less affected.

POLITICS

Academics propose public nomination for 2017 chief executive election

A group of 18 university academics have jointly proposed that any person who gets the support of at least two percent of registered voters in Hong Kong could be eligible to be considered by the nominating committee for the 2017 chief executive election. Those who are endorsed by one-eighth of the nominating body could become formal candidate for the universal suffrage. Brian Fong, one of the initiators, said the idea of public nomination would not undercut the authority of the nominating body. But both the pan-democratic and pro-establishment camps have reservation about the idea.

Government think-tank spends HK$8.74 mln on surveys in 2012, 2013

The Hong Kong government’s Central Policy Unit has spent HK$8.74 million on opinion surveys in the past two financial years, it was revealed. Four pollsters have been commissioned. They include One Country Two Systems Economic Research Center, which is currently headed by Cheung Chi-kong, a member of the decision-making Executive Council. The revelation has drawn accusation from pan-democrats that the government has given advantage to friendly organizations. Cheung refused to confirm whether they had been commissioned by the government.

EDITORIAL

Government halt of ‘Housing for Hongkongers’ policy dents confidence

The Hong Kong government has quietly put a halt to the “Housing for Hongkongers” scheme after the first batch of such flats was launched last year. It was a case of reversal overnight of policies that had not been thoroughly examined on a rational basis. The “removal of goalposts” in policy-making has not only seriously disrupted the operation of market, it also undermined public confidence in governance. If the government fails to give a convincing case of the policy reversal, it will damage policy continuity and stability and may risk spoiling the fruits of the curbs on property prices in the past two years.

COMMENTS

Soul-searching on ‘illnesses’ in ‘one country, two systems’ urgently needed, Lam says

The past two years saw the worst relations between the mainland and Hong Kong since the city reverted to Chinese sovereignty in 1997, HKEJ founder Lam Hang-chi wrote. How to resolve the conflict and suspicion between the two sides and “correct” the relations within “one country”? How to cope with and maintain an appropriate degree of flexibility between the “two systems”? These are the urgent tasks for both sides. There will be dire consequences if the relevant “illnesses” continue to deteriorate.

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