21 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 Tuesday, April 8:


Sell-off in internet, healthcare plays may continue, analysts say

Hong Kong internet and healthcare counters may experience further sell-off in the short term, as more hedge funds are turning to short positions while repricing of risks continue alongside interest rate hikes in certain major economies, analysts said. Tencent Holdings Ltd. (00700.HK) has slid 22.4 percent since it reached its historical high of HK$646 (US$83.3) per share last month, losing a combined HK$269.3 billion market value. Lenders and other traditional economic contributors, in contrast, saw their shares being supported.

HKEx to sell smaller renminbi currency futures to individuals

Hong Kong Exchanges and Clearing Ltd. (00388.HK) is planning to expand its renminbi structured product portfolio to compete with CME Group Inc., said chief executive Charles Li. The plan includes launching renminbi currency futures contracts denominated in a smaller value to draw in individual investors, as well as renminbi currency options, said Li, adding that the exchange will sell, in the coming 12 months, cash settled commodities futures contracts.

Future Fund only targets infrastructure in hard times, Chan Ka-keung says

The proposed Future Fund should only be used to back up government infrastructure construction during economic downturn or at a time the government is in deficit, not as a funding source for supporting current public expenses, Hong Kong’s Secretary for Financial Services and the Treasury Chan Ka-keung told a Legislative Council committee meeting. Chan said it is also more appropriate for the Fund invest in long-term projects of better returns. The establishment of the Fund was proposed by a government-appointed working group on long-term fiscal planning, which warned in a report that the city will run into a structural fiscal deficit in seven years.


Carrie Lam clears legality of academics’ electoral proposal

A top Hong Kong government official has given the clearest signal a 2017 political reform blueprint proposed by 18 academics featuring public nomination for the chief executive election fell in line with the Basic Law. Chief Secretary Carrie Lam said the nomination method was in line with their thinking because the power of the nominating committee would not be weakened. One of the academics, Cheung Tat-ming, described Lam’s comment as good news, adding their proposal would help the nominating body exercise their power of nomination.

Tsang warns imposing anti-subversion law in Hong Kong rocks rule of law

Legislative Council President Tsang Yok-sing has sharpened his criticism against calls for Beijing to implement an anti-subversion provision in the Basic Law by imposing it through another article in the post-1997 charter. Tsang was commenting on a suggestion by a pro-Beijing lawmaker Priscilla Leung, who argued that Article 18 has provided power for China’s national legislature to apply a national law in Hong Kong after consulting a Beijing-appointed Basic Law Committee and the city’s government. Tsang warned such move would deal a heavy blow to the rule of law.


US steps up military tactic to counter rise of China

US defence chief Chuck Hagel has announced an upgrading of US-Japan defence cooperation pact and warned China not to bully Tokyo over territorial dispute. During a trip to Japan before he began a three-day visit to China yesterday, Hagel expressed hope for improvement in China-US military ties. Hagel’s visits fully reflect Washington’s “contact, containment and prevention” tactics aimed to counterbalance China. While seeking cooperation, the US is stepping up strategic rivalry with China.


Anson Chan, Martin Lee US trip positive to Hong Kong, but negative to communists

Although the visit of the democrat duo Anson Chan and Martin Lee to the US has brought about positive outcome with the US taking renewed interest in Hong Kong affairs, its impact is very likely to be negative, HKEJ founder Lam Hang-chi wrote. The pro-communist Hongkongers would insist the city should not have a role in international politics. They would only seek advantage if the city becomes more like a mainland city. It would be sad for Hong Kong and China if they are being seen as more patriotic by lashing out at Chan and Lee.

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