Hong Kong

What China can learn from Hong Kong’s war on graft

15 May 2013

Chasing a former watchdog for lavish dinners sounds trivial, but focusing on the little things is what made Hong Kong clean up. China’s leaders also pledge to root out corruption, but lack three powerful weapons: independent institutions, freedom to complain, and zero tolerance.

Galaxy’s $5.7 bln valuation looks starry-eyed

14 May 2013

The Chinese securities firm’s short-term prospects look bright if capital markets continue to open. But peer beyond the next few years’ earnings, and the case is less persuasive. Broking is a fragmented, commoditised business. Galaxy is big, but potential rivals are bigger.

Hong Kong dockers’ pay sets tone for future strife

7 May 2013

Port workers have ended a month-long strike and accepted a 9.8 pct pay rise - half their original demand. Yet the conflict highlighted Hong Kong’s growing inequality and rising living costs. As China’s economy slows and shifts, dockers and employers will be increasingly at odds.

Galaxy IPO hangs on Chinese equity market lift-off

6 May 2013

Listing the country’s biggest broker in Hong Kong while investors are shunning stocks at home may seem strange. But Galaxy is a bet that China’s markets must at some point get bigger and deeper. If share prices pick up in the meantime, it should benefit more than listed peers.

Radical career move: become a Chinese citizen

18 Apr 2013

Investment banker Marshall Nicholson has swapped his U.S. citizenship for a Hong Kong passport. Though family - and possibly tax - inspired the switch, it will go down well with mainland clients. For Western financiers seeking a local edge, it’s the ultimate display of commitment.

Li Ka-shing offers rays of hope to Telecom Italia

10 Apr 2013

The Italian mobile business of Li’s Hutchison Whampoa could merge with the local former monopoly. The Asian tycoon may also buy out some major shareholders. This messy-sounding idea could be vetoed. But Telecom Italia lacks options and needs to end the awful status quo.

Hong Kong raises stakes in U.S.-China audit battle

27 Mar 2013

The local regulator is suing Ernst & Young for withholding documents on a suspect client. The audit firm says Chinese secrecy rules left it no choice. The case mirrors a broader U.S. complaint about Chinese accounting frauds. But Hong Kong has much more to lose.

Hong Kong experiments with new bubble-busting tool

14 Mar 2013

Two big banks raised mortgage rates after Hong Kong’s Monetary Authority hiked capital requirements for property loans. It’s the first time the activist watchdog has publicly tweaked lenders’ risk models. For western regulators seeking similar powers, it’s an important test case.

Goldman-Morgan rivalry gets personal in Asia

7 Mar 2013

Morgan Stanley’s regional investment banking chief, Kate Richdale, defected to its main Wall Street adversary. It’s tempting to read her move as evidence of a decisive shift, especially following other high-level exits. However, the grudge match has proved remarkably enduring.

StanChart risks remain economic, not regulatory

5 Mar 2013

The London-listed lender shrugged off the fourth-largest industry fine to register its tenth consecutive increase in pre-tax profit. Though UK rules and taxes are a drag, StanChart’s growth is firmly hitched to emerging markets. That makes it unique among Western peers.

Asia’s property taxes are covert capital controls

25 Feb 2013

Hong Kong has hiked real-estate stamp duty in the latest effort by Asian city-states to cool demand. But local first-time buyers are exempt. As long as low rates push investors to seek hard assets in safe havens, pressure to discriminate against foreign speculators will increase.

Asia’s city-states grapple with slowing growth

11 Feb 2013

Singapore and Hong Kong have been regional economic hotspots for decades. Continued expansion requires importing more workers. But popular discontent about crowding and property prices means doors will be less open. Both cities will have to adapt to more pedestrian futures.

Shifting trade winds catch Li & Fung off-guard

14 Jan 2013

It used to be that China produced and the U.S. bought. That’s changing, but at an uncertain pace. A profit warning that wiped 16 percent off the value of Hong Kong supply chain company Li & Fung shows that keeping pace is costly, and there’s plenty of room for error.

Ping An flop could leave HSBC red-faced but richer

9 Jan 2013

The bank’s $9.4 billion plan to offload its stake in the Chinese insurer is in doubt. If regulators block the sale to a Thai billionaire, HSBC’s reputation will take a knock. Finding other buyers won’t be easy. But the recent market rally means the bank could end up better off.

Shanghai stocks set to catch Hong Kong peers

19 Dec 2012

A sharp jump in Shanghai’s index has narrowed the discount between mainland and Hong Kong-listed stocks. Increased quotas for foreign institutions have helped sentiment. If Chinese investors rediscover their enthusiasm for shares, Shanghai may regain its premium.

HSBC proves canny trader with $9.4bln Ping An sale

5 Dec 2012

The emerging market lender flogged 16 pct of the Chinese insurer at a premium to the market price. That’s impressive compared with Bank of America and Goldman Sachs, who accepted discounts for their bank stakes. It should also buy HSBC time to explain its broader China strategy.

HK exchange plays it safe with equity finance

30 Nov 2012

The Hong Kong bourse’s $1 bln share placing allows it to repay more than half the debt used to buy the London Metal Exchange. Ultra-low yields make bonds look tempting. But a recent share rebound - and HKEx’s hefty dividend payout - justifies its cautious approach to leverage.

Chinese consumers move on from old favourites

30 Nov 2012

While China is still spending, some brands have lost lustre, judging by warnings from Yum Brands and jeweller Chow Tai Fook. Slower growth is natural as companies hit a certain size, but fast-shifting tastes are a factor too. Investors need new proxies for Chinese consumption.

Hong Kong offers refuge for China’s orphan stocks

27 Nov 2012

Transport firm CIMC plans to swap its foreign currency “B shares” from Shenzhen to Hong Kong. Capital controls mean it’s not simple. But this offers investors a way out of an illiquid and low-valued investment, and helps tie up a loose end in China’s capital markets. 

PICC seeks strength in numbers ahead of IPO

22 Nov 2012

The Chinese insurer’s 17 investment banks have signed up 17 “cornerstone” backers in advance of its $3.6 bln offering. Though they’re hardly big-name value investors, they are buying more than half the available shares. In a tough market, PICC needs all the help it can get.