Hong Kong stockbroker says tax cuts can lift Hang Seng Index by 10 per cent, sees upside in Alibaba stock
- Bright Smart Securities’ founder Peter Yip urges Hong Kong to lower income taxes to lure talent, capital to strengthen economic recovery
- Stockbroker, who personally owns ‘a lot of Alibaba’ shares, sees upside after record antitrust penalty
“I urge the government to lower the corporate and salary tax to 10 to 12 per cent immediately to retain companies and talent,” the 69-year old company chairman said at a media briefing on Tuesday. “By doing so, we can attract the return of professionals, foreign companies and capital to the city.”
Salary tax in Hong Kong is capped at 15 per cent, while the rate on corporate profits is 16.5 per cent, according to the Treasury bureau.
“I believe that its [share performance] will get better gradually,” said Yip, who owns “a lot of shares” in the company but did not disclose the amount.
Since the fine, Alibaba has appreciated as much as 10.7 per cent to an intraday high of HK$241.80 on Wednesday, and its market capitalisation has expanded by up to HK$516.2 billion. The stock closed 2 per cent higher at HK$237.80 on Wednesday, versus HK$218 on April 9.
Before this week, the Hangzhou-based company in eastern Zhejiang province had lost HK$1.77 trillion (US$228 billion) of value since November 3 when Chinese authorities decided to clamp down on Alibaba and the broader tech sector by abruptly pulling the record-breaking dual stock offering of Ant Group in Shanghai and Hong Kong.
Yip was not as optimistic about other new economy stocks, such as Tencent. “Their valuation has already skyrocketed,” he said.
China’s regulators ordered 34 of the country’s largest technology companies, with a combined value that surpassed the UK’s economy, to conduct a “comprehensive self-inspection” within a month, according to a statement by the State Administration for Market Regulation (SAMR) on Tuesday.