26 March 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 Friday, April 4:


Sinopec said to eye US$30 billion stake sale in retail units

China Petroleum & Chemical Corp. (00386.HK, Sinopec) is said to be working on a sale, worth US$30 billion, of a 30 percent stake in its retail units that include the nation’s largest fuel station network, potentially breaking the country’s record in asset sale by a state-owned company. The refiner is believed to have appointed Goldman Sachs Group Inc. to lead the deal and China International Capital Corp. to advise on its asset restructuring, according to Bloomberg. Group chairman Fu Chengyu has said earlier that Sinopec set up last month a separate entity to run its downstream business as part of a bigger plan for the group’s asset restructuring with proposed deals likely to be completed in the third quarter.

HKEx strategies mapped out with eye on national policies, Chow says

Interview: Hong Kong Exchanges and Clearing Ltd. (00388.HK) is adopting business strategies according to the change in national policies with regard to its goals in renminbi internationalization and opening up of the capital market and the country’s capital account, chairman Chow Chung-kong told HKEJ. The bourse, which is in discussions with its mainland counterparts regarding the potential establishment of mutual market connectivity initiatives, expects the country to achieve its goals by 2020. Brokerages, including Bank of America Merrill Lynch and Deutsche Bank A.G., are upbeat about the bourse prospects with opportunities to be brought about by the connectivity initiatives that are seen to be the start of the so-called through-train scheme for individual investing in equities across the border.

HKMC aims to allow reverse mortgage program secured on life insurance policies

The Hong Kong Mortgage Corp. Ltd. is considering allowing participants of its reverse mortgage program to use life insurance policies as pledges starting in the second half of this year, with a view to raising the program’s annuity, chief executive Raymond Li told HKEJ. Under the proposal, program participants can at maximum secure life policies of underwriting value worth the same amount as the value of their mortgaged properties. As of the end of March, the program has served 589 participants, providing an average monthly annuity of HK$14,200 (US$1,831) on mortgaged properties worth an average HK$4.6 million.


Extension of retirement age of Hong Kong civil servants proposed

Hong Kong government has proposed extending the retirement age of newly-recruited civil servants from 60 to 65 in a bid to tackle ageing population and shrinking workforce. New recruits in disciplined forces could retire at 57, instead of 55. Under a proposal published for consultation among civil servants for four months, current civil servants could apply for extension up to five years after 60 subject to approval by the relevant department heads. Civil service unions generally supported the proposal.

Academics’ moderate 2017 blueprint criticized by democrats, loyalists

A moderate blueprint for the 2017 chief executive election proposed by a group of 18 academics was criticized by both the pan-democratic and pro-establishment camps yesterday. The plan features public nomination, under which two percent of registered voters, or about 70,000, can recommend names to the nominating committee. Anyone who gets the support of one-eighth of the 1,200-member body can become a formal candidate. Pan-democrats said public recommendation could not guarantee the candidacy of the recommended person. Pro-establishment figures said the one-eighth threshold was too low.


New round of economic stimulus in China begins

Faced with more signs of slowing economy, China has finally adopted a three-pronged strategy to stimulate the economy, including speeding up railway construction. It suggests that the leadership is having a growing sense of crisis. A new phase of economic stimulus has begun. But there will not be immediate impact on the economy in the second quarter as some measures will take time to yield results. The fine-tuning measures that have balanced the need for structural reform and economic growth are expected to help stabilize growth in the second half.

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