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 Friday, April 11:


Cross-border individual stock investing scheme worth 550 billion yuan unveiled

Chinese Premier Li Keqiang {李克強} has unveiled the long-awaited through-train scheme that opens the stock markets in Shanghai and Hong Kong for cross-border trading by individual investors, with a quota totaling 550 billion yuan (US$88.52 billion). The green light was given at the ongoing Boao Forum for Asia in Hainan province as Li pledged to forge quality liberalization of the country’s capital market. The policy is expected to roll out in October at the soonest, with the money allowed to go into Hong Kong capped at 250 billion yuan, with a maximum of 10.5 billion yuan permitted per day, while that to Shanghai is capped at 300 billion yuan, with a 13 billion yuan daily limit.

Three convicted in HKMEx bogus documents scandal

Three mainland businessmen have been convicted for possessing fraudulent financial documents of a face value of HK$90 billion (US$11.61 billion) in dealing with the failed Hong Kong Mercantile Exchange. The businessmen — Dai Linyi {戴麟懿}, Li Shanrong {李善容} and Lian Chunren {連春仁} — are due to face sentencing Friday in a district court, which heard the trio used 32 bogus documents involving deposits, guarantees and banknotes they claimed to have been issued by The Hongkong and Shanghai Banking Corp. Ltd., Standard Chartered Bank (Hong Kong) Ltd. and Bank of China (Hong Kong) Ltd.

Qihoo seeks bigger presence in Hong Kong

Interview: Qihoo 360 Technology Co. Ltd. (QIHU.US) is looking to expand its presence in Hong Kong by collaborating with local lenders, said vice president Li Tao {李濤}. The security solution company is also seeking to make up with Tencent Holdings Ltd. (00700.HK) for the first time since the two turned their backs on each other after a conflict erupted in 2010 regarding the instant messaging business. Li said his company is also planning to enter markets in Southeast Asia and other emerging countries such as Brazil, tapping internet finance and security services for intelligent home appliances.


Carrie Lam says no plan to run for 2017 chief executive election

Hong Kong’s Chief Secretary Carrie Lam, who ranked high in popularity polls in the Leung Chun-ying administration, has ruled herself out in the 2017 chief executive election. She said yesterday that she should be a housewife in 2017 when she would have served in the government for 37 years. Political scientist Ivan Choy said Lam’s remarks were understandable. As Leung has said he would seek re-election, it would cause political friction if Lam also planned to run. That said, the public should take Lam’s remarks with a pinch of salt, as circumstances often change.

Separate talk between Beijing officials, pan-democratic lawmakers confirmed

On the eve of their departure for Shanghai on Friday, Legislative Council President Tsang Yok-sing confirmed yesterday that two senior Beijing officials would meet with a group of pan-democratic lawmakers after a session with all members at the end of the trip on Sunday. Chief Executive Leung Chun-ying, who would attend the group session, would not join the pan-democrats’ session. Academics said the arrangement seemed to suggest Leung could not play a role of bridging Beijing and the pan-democrats.


Details of ‘through train’ direct trading between Hong Kong, Shanghai crucial

The green light given to direct share trading between Hong Kong and Shanghai yesterday signaled the beginning of “through train” for Hong Kong stocks. It will help Hong Kong bolster its position as a prime offshore renminbi center while enabling the mainland to speed up the internalization of its currency. But the relaxation of capital flow between the two places will inevitably increase the risk of market fluctuations. It is critically important that details of the arrangements are mapped out properly to ensure a win-win situation.

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