27 February 2020

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 22:


New IPOs get closer in mainland as watchdog unveils new rules

The China Securities Regulatory Commission on Friday unveiled a new set of procedures for approvals of initial public offering applications, heralding an imminent resumption of such activities in the mainland. Analysts expect a total of 610 billion yuan (US$97.93 billion) to be raised from IPOs of more than 220 companies this year. The watchdog has over the past four days posted on its website preliminary listing documents involving 46 companies.

Veteran banker Water Cheung sees limited benefits from through-train

Interview: The newly approved through-train, a scheme for cross-border trading of shares listed in Hong Kong and Shanghai by individuals, is unlikely to boost transactions to a great extent, given different investment expectations and habits, as well as unfamiliarity of investors with the markets on each other’s side, said veteran banker Water Cheung. The scheme may serve more as a breakthrough in the form of cooperation between the two markets and a way to drive market force in the mainland, rather than generating real economic benefits for the two sides, Cheung added.

High profit margin era for Chinese developers gone, analysts say

Mainland developers are no longer able to enjoy lucrative margins which have been on a downtrend amid rising land premiums, construction and labor costs, analysts said. The average gross profit margin of 10 major mainland developers dropped to 27.6 percent for 2013 from 30 percent the previous year, while their average gearing ratio rose to 84.8 percent last year from 65.8 percent in 2012, a HKEJ survey showed. Coverage ratio, however, improved due to increasing issuance of high-yield debentures during the year.


Vincent Lo urges future chief to form united government

Interview: Leading businessman Vincent Lo Hong-sui, a key supporter of Chief Executive Leung Chun-ying, has urged Hong Kong’s future chief to form a united government comprised of like-minded political parties to help secure effective governance. He lamented that the lack of steady support for the chief executive has resulted in ineffective governance. Learning from the lesson of governance difficulties since the handover, Lo said potential candidates who vie for the top post should form their governing team early to prepare for the new administration if elected.

Anson Chan, Martin Lee blasted by China media for foreign democracy trip

China’s official media has stepped up attack against former Hong Kong chief secretary Anson Chan and founding Democratic Party chairman Martin Lee for inviting foreign governments to interfere with Hong Kong’s democratic development. The official Xinhua news agency fire the salvo on Friday, followed similar article carried in the Global Times and People’s Daily earlier in the week. They lambasted the pair’s trip to the United States and Canada, during which they met with US Vice President Joe Biden in Washington. On Sunday, Canadian newspaper The Star backed Chan and Lee, saying foreign countries including Canada should remind China to honor its promises for Hong Kong.


Shanghai court order on carrier may cause further strain in Sino-Japanese ties

A Shanghai court’s order on Saturday against a Japanese bulk iron ore carrier belonging to Mitsui OSK Lines over a legal claim linked to a wartime contractual dispute could further strain Sino-Japanese relations. More importantly, it has set a precedent of civil litigation against Japan over its role in the Second World War, which would have profound political and legal implications. The court order could also cast a shadow over Japanese investors in the mainland and Sino-Japanese trade.

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