Airport board thumbs nose at international best practice
We wrote yesterday about the motion that was passed by Legco's environmental affairs panel recently asking the Hong Kong Airport Authority to undertake a Social Return on Investment (SROI) study, a carbon audit and a strategic impact assessment on the proposed third runway. Legco motions of this kind are not legally binding so we asked the authority what arrangements it was making for these studies, and how long it expected them to take. We received the following snotty reply: 'The Environmental Impact Assessment (EIA) is adopted by most developed countries as a statutory requirement, including [the] US, the UK, Canada, Germany and Australia. However, there is no widely recognised methodology for conducting social costs assessments. The Airport Authority (AA) will ensure full compliance with the prevailing statutory EIA requirements, which are of international standard. In developing ... a three-runway system, the AA will study and handle environmental issues in a highly prudent manner as always, and will explore every possible way to avoid and mitigate any environmental impact that might arise, including marine ecology, noise and air quality.' From this it doesn't look as if the authority has any intention of carrying out any of these studies. Not only does it have the temerity to wave two fingers at Lai See but it's also giving the same salute to Legco.
On its website the authority describes itself as 'a responsible corporate citizen'. The United Nations and the World Bank consider these studies best practice so you would have thought 'a responsible corporate citizen', could come up with a better response than this. Yesterday, the authority held a ceremony in which it bragged about its pledge to make the Hong Kong International Airport 'the world's greenest airport'.
The Legco motion was supported by all the main parties, including Liberal party member Miriam Lau Kin-yee, who is also a member of the authority's board. When we told her that we didn't think the authority was planning to act on the motion she said she would inquire what it planned to do, adding that although she supported the third runway, 'I think they ought to do more than what is just legally required. I understand that infrastructure of this massive nature needs to have the support and understanding of the wider community.' If the airport authority is so convinced of its green credentials why won't it carry out an SROI study? Over to you, Stanley Hui Hon-chung.
CLSA still bullish on luxury goods
Flushed with the success of its Dipped in Gold report last year on the luxury goods sector, stockbroker CLSA, never slow to realise when it is on to a good thing, is back with a sequel. Aaron Fischer, regional head of consumer and gaming research, remains bullish on the sector, forecasting somewhat slower but still strong growth.
The report, written together with Mariana Kou, comes with a number of interesting factoids: global sales of luxury goods are up 47 per cent over the last decade but with the big brands such as Prada and Luis Vuitton having grown 131 per cent over the period; emerging markets account for about half the luxury- goods market; mainland China accounts for a third of sales for Gucci and Prada; according to a McKinsey study in 2008, 31 per cent of Chinese consumers said they were interested in fake luxury brands, but that figure had dropped to 15 per cent last year; financial sector bonuses do not, as is sometimes thought, have a big impact on sales, with the New York State Comptroller estimating the correlation at only 0.45 per cent.
Fischer added that the place to buy luxury goods was Europe, rather than Hong Kong, as the demand from the mainland had pushed up prices in the city. But he couldn't help himself when asked why he was so bullish on luxury-goods stocks when Prada and Chow Tai Fook had fallen since their IPOs last year. 'We actually did the IPO for Prada last year and are very proud of our role,' he beamed. Barely able to contain himself, he pointed out that Prada was up 37 per cent. 'So that was a very successful IPO and Chow Tai Fook is down about 20 per cent; unfortunately that stock has not performed very well but we weren't involved with that one .' We get the message.
Buffett back to his perky best
Good to see Warren Buffett in such perky form after his scare with early-stage prostate cancer. Indeed he went to some lengths at the Berkshire Hathaway shareholders meeting to indicate 'everything was okay'. The 81-year-old was pictured surrounded by nubile cheerleaders and saying that he's 'more likely to get shot by a jealous husband' than die from cancer.