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

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Chairman of Bright Smart Securities Peter Yip Mow-lum photographed in Central in June 2020. Photo: Xiaomei Chen

Published: 7:30am, 15 Apr 2021Updated: 7:30am, 15 Apr 2021

Peter Yip Mow-lum, founder of local stockbroker Bright Smart Securities, believes there’s more than 10 per cent upside to the Hang Seng Index this year. An income tax cut might just be the needed tonic.

“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.”

The incentive could help boost the government’s income and create more job opportunities in the long term, he said, the catalysts needed to support the recovery. The local employment market has shrunk by about 240,000 jobs over the past two years, culminating in a jobless rate of 7.2 per cent in February, according to government statistics.

The Hang Seng Index could climb to 32,000 points by the end of this year, versus Wednesday’s close of 28,900, one of the bullish forecasts in the market. Singapore lender DBS’s wealth management unit last month projected the benchmark could reach 33,400 over 12 months as recovery quickens.

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.

Yip, who traded textile quotas before listing his stock trading business under Bright Smart Securities in 2010, is also bullish about Alibaba Group Holding in his personal capacity, despite recent antitrust gloom surrounding its business prospects.