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January 2014 April 19,7,2013
Greater China
Index predict
Hang Seng Index fell 0.6 percent to 22,684.15. The benchmark gauge of Hong Kong equities sunk 8.2 percent in the first half of 2013 to trail 23 other developed markets tracked by Bloomberg, before rebounding 12 percent in the next six months.
Economy strengthens China’s economy emerged from a two-quarter slowdown in the three months through September, with factory output in August reaching the fastest pace in 17 months. The nation’s government said at last month’s annual Central Economic Work Conference it will seek “reasonable” growth. The nation will set a goal of 7.5 percent expansion for 2014, the same as last year, Caixin reported on its website on December 16. “China is going to concentrate on quality of growth rather than blindly follow GDP figures,” said
It will be a steady year for Hong Kong in 2014 because China’s talking about so many reforms being implemented over the next five years local investors will rise 22 percent this year, according to the median forecast of four securities firms that provided targets for the gauge. The measure slid 2.3 percent to 2,238.6 points yesterday, while the
Teresa Chow, RBC Investment
Francis Lun, chief executive officer of local brokerage GEO Securities Ltd. “There will be growth pains for the market.” Infrastructure and raw material stocks will suffer as local governments spend less on building, while Internet and phone companies will rally as users increase in China, he said. Official gauges of China’s manufacturing and services industries declined in December to four-month lows, data showed last week. Both measures remain above 50, indicating the industries are still expanding. Shares listed in Hong Kong will benefit from the recovery in the U.S. and Europe, according to Arthur Kwong, the head of AsiaPacific equities at BNP Paribas Investment Partners. China’s Communist Party leadership on November 15 detailed changes including easing the onechild policy and scrapping aspects of the household registration system, or hukou, that impeded migration between towns and small cities. Lawmakers are also ending a ban on mainland stock listings and seeking to curb pollution. While mainland Chinese firms traded in Hong Kong are likely to benefit from reform measures, the city’s companies face headwinds this year, according to Credit Suisse. A potential rise in interest rates remains a threat to local property prices, while gaming stocks that led gains last year on the Hang Seng Index are becoming expensive, the bank said in a research note dated December 6. Stocks fell in December, with the H-share index erasing almost all its gains since reform details were announced. Money-market rates surged to their highest since June, when funding costs climbed to a record.
“Moreover, the implementation of reforms such as lowering the entry barriers for private business in service sectors and expanded VAT reforms should help to revitalise service sectors in the year ahead,” Mr Qu said. Reuters
Bloomberg News
Bloomberg News
HSBC services PMI at lowest in over two years
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after a protracted slowdown. While it was expected to lose steam as the government reins in rampant credit growth and demand for China’s exports remains subdued, activity has remained resilient into the December quarter. Beijing has said it will accept slower growth as it tries to reshape the economy towards more sustainable growth, based on consumer demand, after three decades of breakneck expansion led by exports and credit. China’s economic growth is likely to come in at 7.6 percent in 2013, the government has said, just above the official target of 7.5 percent and slightly below the 7.7 percent in 2012. Data for 2013 GDP is set to be released on January 20. “What has been the principal sort of driver of the market since the beginning of the new year has been a disappointment of the Chinese PMI data,” said Guy Stear, Asian credit and equity strategist at Societe Generale in Hong Kong, adding that growth in China is a “focal point” for markets. “We expect the steady expansion of manufacturing sectors to lend support to service sector growth,” said HSBC’s China chief economist, Qu Hongbin.
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hina Mobile Communications Corp, the parent of the world’s largest phone company, is probing a decision by its Hong Kong unit to exit the territory’s television market at a loss one year after introducing service. China Mobile is investigating whether the transaction meets its internal guidelines as well as regulations of China’s State-owned Assets Supervision and Administration Commission, the company said in an e-mail yesterday. The sale involved a unit that owned spectrum to broadcast mobile television service in Hong Kong, the company said, without identifying the buyer. China Mobile beat two bidders in an auction for the spectrum in June 2010, paying HK$175 million (US$22.6 million) for rights to airwaves for mobile TV service. The service, a mix of free and paid programmes that required a plug-in adapter to receive broadcasts on a smartphone, was introduced in Hong Kong in December 2012. Hong Kong Television Network Ltd said last month it paid about HK$157.4 million for the China Mobile unit that owned the spectrum, including options. That amount is HK$17.6 million less than China Mobile paid for the spectrum and related licences. “The Hong Kong market is very competitive as there are many providers of video content,” Ricky Lai, a Hong Kong-based analyst at Guotai Junan International Holdings Ltd, said by phone. “The China Mobile service is quite inconvenient for users because they need an external adapter.” Hong Kong Television bought the unit after it failed to get its own free-toair licence in October. The Hong Kong government’s denial of the licence to Hong Kong Television triggered protests by tens of thousands of people. The demonstrations reflected concerns that Hong Kong’s policies favour big business, lack accountability and may undermine freedom of speech in the semi-autonomous Chinese city. Licences were given to PCCW Ltd and I-Cable Communications Ltd, both controlled by billionaires. Hong Kong Television Network’s founder and chairman Ricky Wong said the government’s denial of the licence was “unreasonable, unfair and lacks transparency”. In November, Hong Kong lawmakers voted down a motion to probe the decision.
Services industry growth confirms year-end cooldown rowth in China’s services industries slowed in December, a pair of surveys showed, mirroring a slowdown in manufacturing and confirming views that the world’s secondlargest economy lost steam at the end of last year. The HSBC Holdings Plc/Markit Economics services Purchasing Managers’ Index (PMI) dropped to 50.9 in December, its lowest since August 2011, from 52.5 in November, HSBC said yesterday. New business expansion was the slowest in six months. The PMI follows a similar survey by China’s National Bureau of Statistics on Friday, which showed a slowdown in servicesector growth to a four-month low of 54.6 from the previous month’s 56.0. Both surveys follow two other P MIs las t week th at sh owed China’s factory activity slowed in December, suggesting the moderation in the country’s growth in the final quarter of 2013 was broad-based. But all four measures remained above the 50 point level that separates expansion in activity from contraction. China’s economy has regained some momentum since mid-year
China Mobile probes exit from HK TV service
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