23 February 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 Monday, April 7:


RMB/USD futures added to HK after-hours trading

Hong Kong Exchanges and Clearing Ltd. (00388.HK) is introducing offshore renminbi versus United States dollar futures contracts in after-hours futures trading session starting Monday, in a bid to match with competition from America’s CME Group Inc. The bourse operator’s senior vice president and head of product and index development Tae Seok Clement Yoo told HKEJ that a new tenor for the fourth calendar quarter month will be put in place to allow better management of longer term renminbi exposure. The exchange also plans to launch renminbi-denominated currency options later, Yoo added.

China internet, technology plays remain top picks

Interview: Internet and technology, consumer, insurance, food and beverage, as well as healthcare plays in China are among the top picks, given a growing middle class in the mainland, said Robert Horrocks, chief investment officer at fund house Matthews Asia. The market’s long-term prospect is bright despite poor sentiment in the short term, Horrocks said, adding that the nation’s savings base should be large enough to support the property market. Shadow banking activities as a proportion of the gross domestic product are relatively low at 40 percent, he said.

Mainland department stores need reform to regain market

Mainland department stores sector is facing a structural change that may require the industry to reform its existing business model to compete with online stores, analysts said. Establishing in-house labels and forging closer ties with mobile application developers such as Tencent Holdings Ltd. (00700.HK) to tap the consumption market through mobile phones are some of the options that department stores operators may consider. The sector is likely to remain under pressure this year before any positive effects of the reform materialize.


Idea to implement Article 23 through national law unconstitutional, Tsang says

A mainland Basic Law Committee member Rao Geping has drawn criticism for proposing other ways to implement an anti-subversion provision in the Basic Law, citing the long delay in local legislation. In an interview with the Bauhinia Monthly magazine, Rao cited mainland experts as suggesting, for instance, applying a national law for the purpose. Legislative Council President Tsang Yok-sing said the suggestions went against the Basic Law, which said it should be done through local legislation. Rao insisted he was only citing others’ views, adding it did not represent the views of the central government.

Beijing slams Biden meeting with Anson Chan, Martin Lee

Beijing has slammed a meeting between United States Vice President Joe Biden and former Hong Kong chief secretary Anson Chan and leading Democrat Martin Lee. The Foreign Ministry’s commission in Hong Kong said in a statement last night on the meeting in Washington that Beijing firmly opposes interference by any foreign nation in Hong Kong’s internal affairs. The White House said after the meeting on Saturday that the US fully supports the democratic development of Hong Kong.


Supply of private flats tipped to rise in HK this year

Although the number of private residential flats scheduled for completion this year is predicted to be the highest in five years, the tally is tipped to drop from 2016. The shortage of housing supply is not expected to be resolved in the short term. Of the 8,600 flats completed last year, 80 percent are in New Territories. Most residential units scheduled for completion in the next two years will also come from projects in the New Territories. Home prices are likely to vary among districts. The key to solve the city’s housing problem, however, is to increase the land supply to help maintain stable supply of housing.

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