TOP NEWS IN 2020
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Daily news: www.hongkongbusiness.hk
Greater Bay Area regulators float wealth management connect scheme The Hong Kong Monetary Authority (HKMA), the People’s Bank of China, and the Monetary Authority of Macao plan to implement a cross-boundary wealth management connect pilot scheme in the Greater Bay Area as a means to facilitate cross-boundary investments by individuals in the area.
Nearly 3 in 5 firms fear virus crisis could spur restructuring Fifty-eight percent of Hong Kong’s companies are concerned that their employment may be vulnerable to possible business restructuring, according to Randstad Hong Kong. Only 42% of respondents said that they are “not too concerned” that COVID-19 will result in a company restructuring, whilst 7% are “extremely concerned.”
14 HONG KONG BUSINESS ANNUAL 2021
Hong Kong’s permanent residents to get $10,000 each Hong Kong permanent residents aged 18 and above will receive $10,000 each from the Hong Kong government, financial secretary Paul Chan said in his budget speech. This would equate to an expenditure of about $71b, according to Chan, and is expected to benefit about seven million people. The government hopes that the cash incentive will encourage and boost local consumption as well as relieve people’s financial burden.
Hong Kong runs fiscal deficit for first time in 15 years Hong Kong recorded a deficit of $37.8b for 2019-20 or about 1.3% of the city’s gross domestic product (GDP), finance secretary Paul Chan revealed in his budget speech. This is the first time that Hong Kong ran a fiscal deficit in 15 years. Chan said that the trade tensions, coupled with the protests that started last June, significantly dampened economic momentum. In the past months the government announced measures that cost about $30b to help boost the economy amidst these times—which, in turn, drove the city to a fiscal deficit.
HSBC resumes plan to axe 35,000 jobs: report HSBC is resuming a redundancy plan that will see over 35,000 employees lose their jobs over the medium term, a memo seen by Reuters showed. The bank will also maintain a freeze on almost all external recruitment, Chief Executive Noel Quinn said in the memo sent to the bank’s 235,000 staff worldwide.
Cathay Pacific floats $39b bailout plan Cathay Pacific has proposed to implement a recapitalisation plan to raise aggregate proceeds of around $39b, which involves preference shares and warrants issue, a rights issue and a bridge loan, an HKEX filing revealed. Cathay Pacific’s CFO Martin Murray stated in an analyst briefing that they aim to repay the Hong Kong government in a three- to five-year period. The aggregate subscription price of the shares is at $19.5b, whilst the warrants to subscribe for shares has an aggregate exercise price of about $1.95b.
Nan Fung Group to turn Kai Tak site into commercial area for $32b Hong Kong conglomerate Nan Fung Group has announced a plan to build AIRSIDE, a 1.9-million-sqft mixed-use commercial development in Kai Tak area, a press release confirmed. The total investment of this project is expected to reach $32b and is set to open in Q4 2022. Hong Kong landlords foray into the co-working space sector as operators Over the past decade, there has been a rise in co-working space operators in Hong Kong. Knight Frank notes that many took the opportunity to serve the growing market of start-ups, small businesses, and freelancers, who appreciate more flexible terms and smaller footprint. Over time, the belief that co-working space operators will disrupt the office space sector has encouraged an influx of capital investment to the co-working space sector, fuelling its growth.
Office vacancy rates in Central Hong Kong hit 15-year high of 6% in August According to JLL, the momentum in new lettings picked up modestly in August, increasing 10% m-o-m, as the third wave of COVID-19 cases began to recede. Consequently, net take-up improved despite still being in negative territory, amounting to - 147,500 sqft (net floor area or NFA), which is the least negative figure recorded so far in 2020. The outward movement from Central has also continued as tenants remained firm in their cost-saving mode.
