Lai See | True universal suffrage would avoid a lot of the brewing unrest

The absurdity of the arrangements surrounding the election of the chief executive in 2017 is rapidly becoming apparent.

Our leaders in Beijing don't want anyone running Hong Kong who is going to cause them trouble, whatever form that may take. They obviously don't want a security risk with someone who chats too freely to foreign powers. They certainly don't want people seeking to undermine the rule of the Communist Party. So despite the promises of democracy over the years, we will end up voting for a set of candidates who have been restricted by virtue of the way in which they are selected. We may all get to vote but the candidates will have been chosen by a relatively small group of electors. Unsurprisingly, people are dismayed by this turn of events.

The government is saying nothing about the process in public for fear of inflaming the situation further. The irony is that this process is increasing politically consciousness among people while radicalising others. Everyday we hear of more groups or prominent individuals saying they intend to join Benny Tai's Occupy Central movement. Ironically, if the powers that be simply said "OK, we said you could have universal suffrage in 2017 - go ahead," it would probably proceed with far less fuss than the current process is likely to cause. It is barely conceivable that Hong Kong people would elect leaders that would seek to antagonise the mainland. They may not love the Communist Party but everybody here recognises that Hong Kong's future is tied to the mainland. This mishandling of the 2017 elections will cause more trouble than if true universal suffrage was granted.

Eyebrows are being raised over the somewhat pricey valuation of the China Galaxy Securities IPO, says International Financing Review. Nine of the 11 pre-deal reports seen by IFR gave Galaxy valuations significantly higher than larger listed rivals. The lowest turns out to be a higher price-book value than the much larger Haitong Securities, which was valued at 1.3 times, while Citic Securities, which is even bigger, trades at 1.6 times. According to IFR, valuations for Galaxy by its advisers ranged from 1.1 to 3.9 times. These unusually high valuations have led people to wonder about the independence of pre-deal research. IFR goes on to say it was told that PICC told banks on its US$3 billion IPO last November that it wanted a valuation of 130 billion yuan (HK$162.09 billion) from them, although the company denies this. It notes that Macquarie was dropped as a bookrunner for the IPO of mainland company Future Land Development, after it came up with a much lower NAV in its pre-deal research than other bookrunners. It quoted one banker as saying: "It's sad, but we have to admit that growing competition among banks on China IPOs has started putting pressure on the independence of pre-deal reports." Investors seem to think that Galaxy should be selling its shares at a forward PBV of 1.2 to 1.3 times. But the word is that book building is likely to start at 1.5 to 1.6 times. Book building starts on May 6 and pricing is due on May 15. Watch this space.