3 Jan 1999 FOLLOWING the government-ordered merger between Guotai and J&A Securities last year, a Citic Securities official reveals the company is preparing a takeover of China Securities. The Beijing-ordered takeover, if realised, will see Citic buying a more than 20 per cent of China Securities. (SCMP) UNOFFICIAL calculations contained in the end-of-year review of estate agent Chi Cheung Property show $338 billion of properties have been sold last year, 61 per cent less than in 1997. Analysts blame the fall on rising unemployment and a credit crunch stemming from the recession, and expect developers will have to sell flats at steep discounts. (SCMP) SOURCES say the State Council has set this year's economic targets, with gross domestic product growth at 7 per cent, fixed-asset investment growth at 12 per cent, and retail price inflation at less than 2 per cent. These targets are expected to be passed by legislators in next month's National People's Congress. (Economic Times) 4 Jan 1999 THE euro's first trading day sees the new currency rising strongly against the US dollar to US$1.19 in Asian trade, compared with the debut rate of $1.1747 in Sydney. While many European stocks jump more than 3 per cent, Tokyo and Hong Kong stocks fall 3.08 and 2.38 per cent, respectively, on concern the strong euro would derail Japan's economic recovery. (SCMP) SECRETARY of Financial Services Rafael Hui Si-yan says some form of investigation into the collapse of Peregrine Securities is inevitable. Securities and Futures Commission chairman Andrew Sheng is expected to propose to how the investigation should be carried out in two weeks. (Economic Journal) GUANGDONG province's financial consultant, Goldman Sachs Asia, sends financing restructuring proposals on behalf of Guangdong Enterprise and the provincial government to GE's creditors. One of the proposals is to allow Guangdong Enterprise group companies to defer paying principal portions of loans until April 15. (Economic Journal) 5 Jan 1999 A BEIJING source says the State Council has approved in principle the reform proposed by the Ministry of Information Technology to split China Telecom's operation into four companies. The units to be spun off will cover the telecommunications giant's fixed-line, mobile, satellite and paging businesses.
(Economic Times) THE Securities and Futures Commission grants an investment adviser licence to Exchange Fund Investment, paving the way for the Government's investment manager to start trading its multibillion-dollar share portfolio. (SCMP) PROPERTY agent Brooke International predicts mass residential property prices to increase slightly this year, but expects luxury flats to fall 5 to 10 per cent. The agency sees further slides in prices and rents in the office market, due to oversupply and the weak economy. (SCMP) 6 Jan 1999 FINANCE Minister Xiang Huai-cheng announces the end of mainland development zones, affecting tens of thousands of domestic and foreign firms. The preferential tax policies enjoyed by these companies will be phased out in four years until 2003. However, the five special economic zones will not be affected. (SCMP) IN addition to working on the listing of Exchange Fund notes, the exchange is eyeing opportunities to list corporate debts. It hopes to attract local corporations to switch their listing of company debts from Luxembourg, where more than 90 per cent of local listed companies choose to list their corporate debts. (Ming Pao) INSTITUTIONAL creditors of Guangdong International Trust and Investment Corp express disappointment over Beijing's failure to give clear signals on how the collapsed company's debt will be handled. They demand greater transparency in Gitic's liquidation. (SCMP) 7 Jan 1999 THE Hang Seng Index surges 4.49 per cent on market participants' anticipation that banks will announce a fifth interest rate cut in less than three months, and Wall Street's record-breaking performance on the previous day. Regional shares also post strong gains, with Jakarta gaining more than 7 per cent and South Korea more than 4 per cent. (SCMP) WHILE The Walt Disney Co is considering where to build its proposed theme park in the mainland, Beijing is understood to have encouraged Disney to build the park in Hong Kong. Meanwhile, the Hong Kong Government has set up a cross-department working group, led by Chief Secretary Anson Chan Fang On-sang, to co-ordinate discussions with Disney on issues related to the proposed park. (Commercial Daily, Economic Times) PHILIPPINE Airlines (PAL) chairman Lucio Tan lures four Cathay Pacific Airways senior executives to help rescue the airline. Most of the four have been involved in the failed negotiations between Cathay and PAL, due to PAL's foreign creditors' rejection of its debt restructuring proposal. (SCMP) 8 Jan 1999 THE high cost of doing business in Hong Kong is driving multinational companies away. Director General of Trade and Industry Francis Ho Suen-wai says the number of regional companies with headquarters in Hong Kong has fallen from 903 in 1997 to 819 on June 1 last year, a drop of 9.3 per cent. (SCMP) THE general insurance sector felt the effects of the downturn last year with premium income dropping 3 per cent compared with growth of 5.3 per cent in 1997. Insurance Commissioner Alan Wong Chi-kong says the fall is primarily due to declines in motor insurance and employees' compensation insurance schemes. (SCMP)
