The Week that Was
Sunday CENTALINE Properties' valuation department estimates the Government's treasury can expect to receive about $3.88 billion in revenue from the sale of 12 plots of land this year. The number of residential units that could be built on the land was less than 4,000, reflecting the Government's conservative attitude towards sales. (Economic Journal) PricewaterhouseCoopers partner Chris Barlow said a carefully planned corporate recovery programme would help preserve jobs and benefit creditors and the overall economy. He said appointing experienced financial advisers acting independently on behalf of creditors and debtors was the key to successful corporate workouts. (SCMP) Monday HSBC Holdings unveils a 21 per cent drop in net profit to US$4.31 billion for last year compared with the previous year. Provisions for bad and doubtful debt had risen to US$2.63 billion from US$1.01 billion in 1997. The bank said it would list in New York in a bid to enhance its status as a global bank. Meanwhile, its existing two classes of shares would be consolidated into a single class of shares, denominated in US dollars. (SCMP) TWO months after losing a bid to a United States consortium in its attempt to buy financially troubled Korea First Bank, HSBC Holdings signs a memorandum of understanding with the South Korean Government to acquire a 70 per cent stake in Seoulbank. Analysts said the acquisition would allow the bank to compete on level ground with banks in South Korea. (SCMP) Tuesday AFTER HSBC Holdings says it will give its board of directors the authority to buy back shares from the market, HSBC chairman John Bond tells analysts the number of shares that will be bought back will not exceed 10 per cent of issued shares. Some market participants speculate the reason behind the move is to help boost the bank's share price, hence putting up a barrier against other international banking giants' acquiring it. Meanwhile, local fund managers and a director of Exchange Fund Investment express support for HSBC's buyback proposal, saying it provides an option for the Government to unload its massive share portfolio.
(Economic Times, SCMP) AFTER posting a decline of 1.6 per cent in December, Hong Kong's consumer price composite index fell 1.1 per cent in January, the third consecutive month in which the SAR economy was in the deflation mode. High unemployment continues to dampen consumer demand, which has resulted in widespread price discounting. In the three months to January, the unemployment rate rose to 5.8 per cent. (SCMP) Wednesday BRITISH-based Standard Chartered Bank revealed a 7 per cent increase in profit before provisions to GBP1.13 billion (about HK$14.01 billion) mainly from a large jump in profits from treasury operations. Attributable profit is however dragged down by a 179 per cent increase in provisions for bad and doubtful debt and contingent liabilities, mainly resulting from its Asian operations, to GBP436 million.
(SCMP) THREE American insurance companies and one local firm have been approved to participate in the mortgage insurance programme organised by the Hong Kong Mortgage Corp, which will enable home buyers to borrow up to 85 per cent of their property's assessed value, 15 per cent more than the present mortgage ceiling. To participate, borrowers will either have to pay a monthly insurance premium of about $300, or make a one-off premium payment of $30,000. (SCMP) TELEVISION Broadcasts says it will relocate from the TV City on Clearwater Bay Road to Tseung Kwan O, where it will develop new television-production facilities. The company said it would pay Hong Kong Industrial Estates $210.36 million for the site, subject to TVB shareholders' approval. TVB says the present site is not adequate to support future development. (SCMP) Thursday DISNEY of the United States is understood to have issued a letter of intent to the SAR Government, indicating its plans to build a theme park on Lantau, expected to be completed by about 2005. One of the conditions of Disney's proposal is that the Government will have to provide free land for the project, and be responsible for site assembly and land reclamation.
(Apple Daily) HUTCHISON Whampoa's sale of a 4.2 per cent stake in its British telecoms arm Orange for HK$5.28 billion prompted a 6 per cent drop in Orange's share price in London. The sale is part of a large-scale fund-raising drive which will include a US$500 million eurobond issue. On the same day, Orange reports its first profit since it was launched in 1994. (SCMP) CONGLOMERATE First Pacific sells its security and armoured transport arm FPD Guardforce, which supplies security and fire protection systems in Hong Kong, Macau, Taiwan and Britain, for US$120 million to British-based group Williams. The sale is the latest in a string of First Pacific's asset disposals which began in December 1997. (SCMP) Friday A SURPRISE offer to buy Sally Aw Sian's majority stake in Sing Tao Holdings comes from United States financier Sam Zell. According to sources familiar with the deal, a new consortium would be made between Mr Zell, China Enterprise Development Fund and the Investment Co of China, two Dublin-listed investment firms that had made an earlier offer for 23 per cent of Sing Tao. (SCMP) SOURCES reveal the Financial Secretary Donald Tsang Yam-kuen will merge and list the futures and stock exchanges and the three clearing houses. The change is expected to end allegations that the stock market is run like a private members' club.