19 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 Thursday, April 10:


CITIC Group backdoor listing plan details may come next week

CITIC Pacific Ltd. (00267.HK) is said to unveil next week details of its plan to acquire assets from its parent company CITIC Group Corp. The deal will involve issuance of new shares and convertible bonds, sale of existing shares and bank loans, Caijing Magazine reported citing sources. The proposal, which will in turn put the whole CITIC Group on float, will result in the Ministry of Finance losing 30 percent of its control in the previously wholly-owned state company. Meanwhile, the listed company has obtained exemption from Hong Kong Exchanges and Clearing Ltd. (00388.HK) to keep public ownership at a minimum of 15 percent instead of 25 percent, the report said.

Vanke seeks to tap into SOE ownership reforms

China Vanke Co. Ltd. (000002.CN), a leading mainland property developer, is interested in a proposed co-ownership structure in state-owned enterprises, tapping opportunities stemming from the nation’s reforms in those companies, said president Yu Liang {郁亮}. The developer has been approached by a number of institutions for potential deals, Reuters citing Yu as saying at a seminar. The shareholding structure reform at SOEs is aimed at introducing private capital into restricted industries, with China Petroleum & Chemical Corp.’s (00386.HK) planned sale of retail business being a precedent.

Hong Kong property prices seen dropping 10 to 15 percent

Hong Kong property prices may slide 10 to 15 percent this year, given rising expectation of a hike in the Fed funds rate at a time earlier than previously expected, said Wong Ka-fu, principal economics lecturer at the University of Hong Kong. However, Wong said there is no pressing need for the government to withdraw any existing property curbs at the moment, as economic growth is robust enough to absorb the shock in the property sector. The university forecast the city’s growth to come in at 3.3 percent for the first quarter and 3.7 percent for the second quarter.


Tang says number of candidates for chief executive race should be capped

Former chief secretary Henry Tang has proposed a cap on the number of candidates in the 2017 chief executive election in Hong Kong. He said too many candidates would make it difficult for candidates to expound their views at election forum. Tang cited the experience of the 2012 election, in which he lost to Leung Chun-ying in a three-candidate race. He also proposed turning corporate votes for electing the nominating committee into individual votes to help broaden the representation.

Lawmakers urged to drop 1,917 amendments for early approval of budget

Financial Secretary John Tsang has urged lawmakers to drop amendments to the 2014/2015 Budget to avoid adverse impact on people’s livelihood. Tsang was commenting on a list of 1,917 amendments moved by radical legislators aimed at delaying the approval of the budget-related legislation. Tsang said the total tally was higher than last year’s, which would take a total of 60 hours just for the voting procedure, not to mention the debate. A lawmaker, Chan Chi-chuen, said he would not withdraw his amendments unless the government agreed to offer a HK$10,000 hand-out for each resident.


Fluctuations of yen, stock market cloud Japan outlook

Japan central bank’s decision yesterday to keep its monetary policy unchanged has spurred yen, but put pressure on the stock market. Taken together with external risk caused by the Ukraine crisis, the fluctuations of Japanese currency and stock market are set to dent confidence in consumption. The negative impact caused by the hike in sales tax is likely to grow further. With the economy slowing further, pressure will grow on the central bank to double its effort to loosen the monetary policy in the second quarter.


CCP, KMT losers in Taiwan student protests against trade pact

Aside from the Chinese Communist Party, the pro-independence faction in Taiwan’s ruling Kuomintang is also a loser in the protests led by students against a cross-strait trade deal. Opinion polls show Taiwan people are largely sympathetic towards the students. They were unhappy with the government’s handling of the legislation, which has profound impact on the island. President Ma Ying-jeou is caught in a dilemma. It would be difficult for him to push the legislation again. But if he gives up, he will become a total loser.

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