INFO · Search
· Chinese version · Subscribe

Business

Politics

2024 US Election: American voters’ concerns soar over inflation impact

  • By: Junzhe JIANGEdited by: Robin Ewing
  • 2024-11-06

Washington, DC – The economy is a driving issue in today’s presidential election in the United States, voters at the polls said. This is tracked by a September report that said around 81% of U.S. voters cited the economy and high inflation as their top concern, followed by healthcare and Supreme Court appointments, according to a survey from Pew Research Centre. Ben Frank, 34, a resident of Pennsylvania, said he has to pay more to raise a family of seven: “The food prices went incredibly high after the pandemic,” Frank said. “I used to pay US$150 (HK$1166.2) for one week, and it cost me US$200 (HK$1554.92) now.” James Wright, who works at mega retail outlet Target in Pennsylvania, said, “Food and gas are so much more expensive than before.”  In the last month, he spent around US$1,000 (HK$7774.76) on food, gas and other bills, over half his salary. Trump inaccurately blamed Biden’s government in the debate with Kamala Harris: “We have inflation like very few people have ever seen before. Probably the worst in our nation's history.”  The inflation rate in the world’s biggest economy reached a three-year-low of 2.4% in September from a peak of 8% in 2022, according to the CoinNews Media Group. The inflation averaged 1.9% from 2017 to 2021 when Donald Trump was president, while the average rate has been on track at 5.6% in the past three years. Frank said that Donald Trump could solve the issue, although no further policies were given by the former president except to levy more tax on Chinese and other imported goods. People love Trump because he can bring something special, Frank said, and he thinks Trump’s policy may work if Americans consume more from nearby countries with lower transportation fees. Harris proposed tackling high prices by fighting against …

Society

Gen Z entrepreneurs give new life to waste fabric

Several toy bears in cute uniforms sat at a booth at Rethink HK 2024. Many passersby stopped to take photos and touched them gently.  These bears were wearing clothes made from discarded old school uniforms. Their handbags and hats were also made from waste fabrics. Dress Green, a social enterprise founded by 29-year-old Emma Yu and her husband, has partnered with around 30 local schools to recycle used school uniforms into the UNI Green Series.  The Series offers a wide variety of souvenirs for student graduation gifts, including bears wearing old uniforms, pencil bags, tote bags, pouch shoulder bags, fisherman’s hats, cushions etc.  Since the startup's inception in 2021, it has recycled over 3,000 uniforms and pieces of clothing, and produced more than 4,500 upcycling products, according to Dress Green. The growth of Hong Kong's fast fashion industry has resulted in tons of textile waste being sent to landfills, and many Gen Z members have discovered the serious impact of textile industry pollution on the environment and have created sustainable brands in the hope of combating excessive fabric waste and drawing more attention to the issue. “I felt that Gen Z are more focused on sustainability issues than the previous generation,” said Howard Ling, 49, a social enterprise consultant and Professor of Practice at Baptist University. “This is because they are getting more information about environmental protection from diversified media channels and also from schools and communities.”  With the rise of fast fashion, the amount of clothing produced and thrown away has skyrocketed. According to the European Parliament, the global fashion industry generated nearly 20% of the wastewater and about 10% of the carbon emissions in 2023.  In Hong Kong, 404 tons of textile waste were sent to landfills each day in 2021, accounting for 3.6% of municipal solid waste, …

Business

Hong Kong Fintech Week 2024: Virtual banks call for customised policy rollout to enhance competitiveness

  • By: ZHAO Runtong、BO ChuxuanEdited by: Chi On LIU
  • 2024-10-29

Hong Kong’s virtual banks need more regulations that would make them more competitive compared to the conventional brick-and-mortar banks, the experts said on Tuesday. Digital banks, which deliver banking services exclusively or primarily through the internet or other forms of electronic channels, are subject to the same set of regulatory requirements that apply to traditional banks according to HKMA. The eight licensed digital banks of Hong Kong together gained HK$49.9 billion in assets last year, which accounts for only 0.3% of the total market shares, according to the HKMA’s data. Total deposits of the eight banks amounted to 2.2 million at the end of 2023, accounting for 8.8% of the total depositors in Hong Kong and reported zero profits according to HKMA. Paul Tang, the chief operating officer of Payment Asia, echoed the proposal that virtual banks need more pertinent regulations to support their business expansion in the short term. "The investment cost of virtual banks is high in the early stage, while the operation mode is also different from traditional banks," said Tang. The virtual banks in Hong Kong were established with the mission of stimulating more innovations, fintech adaptations, and competitiveness. Nonetheless, all eight licences haven't started to make profits and have to follow the exact requirements as brick-and-mortar banks, according to the city's de facto central bank. Virtual banks, such as Air Star, provide up to 6.88% of annual interest rates, offering higher interest rates to attract people's deposits. "Digital banks are different from traditional banks, so old ways don't fit. Only with new policies can digital banks leverage their unique advantages," said Oliver Hughes, Head of International Business at TBC Bank Group, highlighting that virtual banks in Hong Kong expect new regulation to support them as they compete with traditional banks. "We try to remove that …

Business

Policy Address 2024: Hong Kong to fund HK$1.5 billion for helping local start-ups and boosting technology development

  • By: BO Chuxuan、WANG Ruoshui、Yichun FangEdited by: Runqing LI
  • 2024-10-16

Chief Executive John Lee Ka-chiu announced on Wednesday to raise HK$1.5 billion for Hong Kong start-ups and build Hong Kong as an international innovation and technology centre. The government will redeploy $1.5 billion to set up funds jointly with the market in start-ups of strategic industries to facilitate the local enterprise environment, according to John Lee’s latest policy address. Meanwhile, the city’s top leader expanded Cyberport's Digital Transformation Support Pilot Programme to cover the retail, food and beverage, tourism, and personal services sectors, subsidising SMEs for digital transformation on a one-to-one matching basis. “It is good for SMEs to have more financing channels, but the impact of these funds on SMEs is not significant,“ said Adrian Ho, a legislative council member concerned about the SMEs topic. “For matching funds, it's difficult for some people to access private sector investments.” Similarly, Ting Pak-sun, the Chief Executive Officer of an IT start-up which received about HK$ 600,000 from the Cyberport Incubation Programme and different government programs, also agreed that it is an effective policy. “Sponsored by government funds, SMEs like us can provide investors with some use cases to refer to,” Ting said. The Innovation and Technology Fund (ITF), which aims to support local companies in upgrading their technology and developing innovative ideas, has helped around 75,881 projects by the end of August. However, Mars Zhou, the Chief Executive Officer of another intelligence company, also expressed his worries about the deployment method. “Since it is not tough for start-ups to obtain incubation funds in Hong Kong, the government may spend a lot of money but to invest in some low-quality companies, ” Zhou said. Adrain Ho cautioned that the policy may not help the company grow its turnover, although digital transformation can reduce costs and increase efficiency. “Digitization is the future, but …

Society

Policy Address 2024: Hong Kong slashes the liquor tax to 10% to boost the industry growth

  • By: XIA Fan、ZHAO Runtong、Haoming ZhouEdited by: Chi On LIU
  • 2024-10-16

Chief Executive Lee Ka-chiu decided to reduce the tax for high-end liquor products to 10% to save the sluggish local industries on Wednesday in his latest policy address. The Hong Kong government said the duty with an import price of more than HK$200 will be lowered to 10% for the portion above HK$200 from 100%, effective on Wednesday. Simon Lee Hoey, one of the legislative council members who proposed the tax cut, said the cut is in the hope of pushing higher-quality alcohol consumption.  “The lower liquor tax would make a significant change as we can bring various choices to consumers,” said Zach Chan, director of sales and marketing of Hong Kong Liquor Store, “ Besides, it can also stimulate the high value-added industries and facilitate the liquor’s trades. Under the heavy tax policies, the average drinking volume of Hong Kong residents is at a relatively lower level compared with the cities in the Western Pacific region, according to the city’s health department. The decrease in the liquor tax will have a similar effect as the red wine tax cut in 2008 to spark the related products, Chan added. The number of wine-importing companies rose to 800 in 2023 from 2008, and the number of wine retailers increased more than five times last year compared to 16 years ago, according to HKTDC.  "We regard the cut of liquor as good news to increase sales as it allows us to present our customers with more diverse products," said Cyrus Lau, the owner of  Zhangmen bar in Mongkok, "We are collaborating with liquor sellers to launch a series of new menus for liquor." Chan added that the lower liquor tax reduces costs for retailers and bar owners, allowing them to use it to give back to customers.  However, the Hong Kong Alliance …

Business

Hong Kong stock market ends six-day rise after the Chinese rate cut

  • By: Haoming Zhou、ZHAO RuntongEdited by: Runqing LI
  • 2024-09-23

Hong Kong's stock market twisted the six-day increase and closed lower as China’s central bank slashed the short-term rate after the US interest rate eased the yuan’s pressure. The Hang Seng Index edged down by 0.06% to 18,247.11 at the close, snapping the six-day streak to last Friday, and the Hang Seng Tech Index decreased by 0.15% due to the drop in mainland electric vehicle stocks. XIAOMI-W Holdings jumped by 3.37% to HK$20.55 after announcing the official launch of the latest Redmi Note 14 series on Sept. 26. Chinese Aoyuan Group surged by 126.89% as the UAE-based investment firm, Multi Gold Group, became its main shareholder. The Chinese Biotech company Wuxi AppTec dropped by 3.65% at the close, and WuXi Biologics, its subsidiary, slipped by 5.08%. CHINA RES Power Group rallied 3.33% to its five-day high of HK$19.84 after the company published its financial report. LENOVO Group surged 2.56% to HK$9.63, and GEELY AUTO Group added 2.11% to HK$10.18 on its first trading day after launching its new car last Friday night. “The cut of US interest rate last week made Hong Kong’s stock gain rapidly,” said Herald van der Linde, the head of equity strategy, Asia Pacific at HSBC.“But this week, as initial excitement and confidence at first hearing the interest rate cut have passed, people are considering whether the market could meet their expectations.” Financial Secretary Paul Chan Mo-po reminded investors the pace of cuts in the prime rate used by commercial banks ‘may be slower’ than those in the US on Sept. 19. The People’s Bank of China cut the 14-day reverse repurchase rate to 1.85% from 1.95% on Monday to maintain the liquidity of the banking system, according to the statement on its website. The weak outlook of the US economy leads to the interest rate …

Business

Hong Kong banks trim prime rates firstly in five years after the US rate cut

  • By: BO Chuxuan、Yichun FangEdited by: Junzhe JIANG
  • 2024-09-19

Hong Kong lenders have lowered their prime rates for the first time since 2019 to boost the local economy just after the US Federal Reserve’s interest rate cut. HSBC cut the prime lending rate by a quarter of a point to 5.625% effective Friday, and the deposit rate over HK$5,000 will be decreased by the same margin to 0.625% per year, according to the bank. Bank of China (Hong Kong), also reduced the loan rate for its best customers by the same amount to 5.625%, starting from Sep. 23, the bank said. The action echoed the US Federal Reserve’s decision to cut the base rate by 50 basis points on Thursday. Hong Kong Monetary Authority, the city’s de facto central bank, followed the decrease to 5.25% to maintain the exchange rate with the US dollar. “By now various indicators show that inflationary pressure in the US has eased,” said Howard Lee, the acting chief executive at HKMA. “With signs of labour market cooling down, the Fed’s 50-basis-point rate cut is largely in line with market expectations.” During the Fed’s rate-hike cycle since March 2022 in response to inflation, interest rates were raised 11 times by a 5.25 percentage point, according to the HKMA. Chong Tai-leung, the executive director of Lau Chor Tak Institute of Global Economics and Finance, said the Interest rate cut will release money from fixed deposits, and most of this money will go back to the stock market, which simulates stocks upwards first.  “If all the money from fixed deposits comes back, the stocks could be pushed to over 30,000; even half of it comes back, our stocks could also soar to about 24,000.” The Japanese stock market tops the increase of 2.1% among major Asian markets on Thursday. The Hang Seng Index reached a two-month high …

Business

Midea’s Hong Kong IPO drives the market to a two-week high in its first-day trading

  • By: XIA Fan、WANG RuoshuiEdited by: Junzhe JIANG
  • 2024-09-17

Midea Group pushes the Hang Seng Index to reach its highest in the past fortnight as the city’s biggest initial public offering in over three years amid the sluggish local market. Under code 0300, the shares of the global electronic appliance giant opened at HK$ 59.2, an 8% increase from its listing price of HK$ 54.8, and closed at HK$59.1.  The Hang Seng Index reached a two-week high and closed at 17660.02 accordingly. The Company’s Shenzhen-listed shares climbed by 1.83% last Friday, while the CSI300 index, which indicates the performance of the Top 300 Chinese companies, dropped by 0.42% compared with the previous close. The Shanghai and Shenzhen stock markets are closed today due to the Mid-Autumn Festival.  Midea Group's IPO this time received 5.31 times oversubscription for the public offering and 8.06 times oversubscription for the international offering. It sold 566 million shares after exercising the option to expand its offering by 15% due to the excess demand, according to the company’s filing to the Hong Kong Stock Exchange. The Foshan-based Midea priced its share at the top of the marketed range of HK$54.8 to raise $4 billion (around HK$31.2 billion), which made it the city’s biggest debut after Kuaishou Technology since early 2021.  The Chinese manufacturer introduced 18 cornerstone investors who subscribed to 179.0327 million shares, approximately $1.258 billion (around HK$9.811 billion) of the offered shares. The list includes COSCO Shipping Hong Kong, UBS AM Singapore, and BYD’s subsidiary Golden Link, according to its IPO documents. Despite its strong performance today, Renee Wu, 28, an insurance agent at AIA Group and individual stock trader, remains sceptical about purchasing Midea’s shares.  “I won't touch Chinese concept stocks anymore. I feel they lack investment value,” Wu said. “The risks they bring outweigh what they can provide. Chinese concept stocks are …

Business

Huawei unveils world’s first tri-fold phone

Chinese tech giant Huawei unveiled the first tri-fold smartphone, priced at 19,999 yuan (HK$22,000), yesterday at a launch ceremony in the southern tech hub of Shenzhen. Pricier than earlier models such as Huawei’s double-fold phone Mate X5, the newly launched Mate XT is more than double the starting price of Apple’s iPhone 16 Pro Max, which was unveiled just hours ahead. Huawei's foldable phone Mate XT allows users to fold it into three sections like an accordion screen door. According to Yu at the launch, prices for the new smartphone start at 19,999 yuan for 256 gigabytes, with higher memory versions available for 21,999 yuan and 23,999 yuan. The phone comes in red and black colours. “The average consumer has limited knowledge of smartphones, let alone the benefits and value of the products,” said Will Wong, a senior researcher at IDC Consulting. “Therefore, they may be put off by its high price.” New products from both Apple and Huawei will be available from 20 September. Jene Park, an analyst at research firm Counterpoint, said the upcoming new Huawei products are not expected to have a major impact on Samsung's and Apple's business in terms of volume. “With a starting price of 20,000 yuan, more than double the starting price of the comparable iPhone 16 Pro Max, and limited production, the tri-fold phone is likely to be more of a symbol of Huawei's tech prowess than a major sales driver,” said Wong. Although Apple has shown strong demand in China as a mobile phone producer, a recent report released by Canalys in the second quarter shows it has fallen out of the top five in terms of sales for the first time in China, dropping from third to sixth place. “Huawei's new product may not have a huge impact on sales …

Business

Hong Kong ELS turmoil Unfolds: Escalating Damages Surge Like an Avalanche

  • By: Subin JO、Runqing LIEdited by: Ji Youn Lee、Chi On LIU
  • 2024-06-13

Three years ago, Kang Jong Hyun, 62, visited a major commercial bank with the intention of utilising the retirement savings he had accumulated through a lifetime of dedicated work. Drawing on decades of experience, he is striving to formulate an investment plan for a better old age life. In an interaction with a banker, he revealed that despite clearly expressing a preference for safe investments, he was advised to consider Equity Linked Securities products linked to the performance of the Hang Seng China Enterprises Index. "I told the banker I dislike risky investments like funds and prefer something safe," Kang said.  However, influenced by the banker's recommendation, he subscribed to ELS instead of opting for regular interest-bearing deposits.  "The banker assured me this product was not risky and similar to a deposit. I fell into this situation simply because I trusted the bank. I can't even tell my family, and I can't sleep at night," Kang said. According to the Financial Supervisory Service's investigation in January, three out of 10 bank ELS investors are 65 or older and often need help comprehending the complex structure of derivative products. Furthermore, 1 out of every 10 investors were first-time subscribers, indicating a need for familiarity with such financial instruments.  The criterion for considering bank investors as elderly is set at 65 in South Korea, emphasising the heightened responsibility to exercise caution when advising and recommending investments to these senior individuals. As of November 2023, the total volume of Hong Kong index-linked ELS products sold to investors amounted to 19.3 trillion KRW (around HK$ 11.3 billion). Among them, about 82.1% were sold by banks, according to the Financial Services Commission of South Korea. As a derivative, the ELS product linked to HSCEI aims to pay customers with a fixed return based on the …