Here's what caught Hong Kong Business readers' attention in 2020

from Hong Kong Business High Flyers 2021

the keys to the castle Driving the Asian beauty boom through e-commerce

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.”

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.

Daily news: www.hongkongbusiness.hk

Restructuring now inevitable, says Cathay Pacific

Cathay Pacific Group warned that a restructuring is now inevitable in order to protect the company, its aviation hub in Hong Kong, and its employees, a group executive said in a press release.

Chief customer and commercial officer Ronald Lam said that it is burning cash at a rate of $1.5b to $2b per month despite actions to reduce cost.

Middle management bears highest mental stress level: survey

Middle management endures the highest stress level of unprecedented challenges brought about by the coronavirus pandemic, according to a survey by Bupa. The survey revealed that over half of the middle management had experienced the symptoms of anxiety (58%) or depression (57%).

Tai Wai subscribers not expected to shift to secondary markets: JLL

Tai Wai project subscribers are not expected to shift to secondary markets but to the 1,531 new projects in the vicinity amidst overwhelming subscription for the first phase of The Pavilia Tower, said JLL. All 769 units at the Phase 1 of The Pavilia Tower were sold in two weeks since its launch. JLL senior director of capital markets Norry Lee mentioned various reasons as to why they think subscribers will not move to secondary markets any time soon.

Over a quarter of Hong Kong employees experienced 30% pay cut

Over a quarter or 28% of Hong Kong employees have faced salary reductions of over 30% as a direct result of the pandemic, according to the COVID-19 Hong Kong Report by JobsDB.

This is said to be attributed to various factors brought about by the pandemic, including reduced or suspended bonuses, suspension of salary increases, and salary freeze. The effects of the pandemic is expected to create a new normal, presenting new challenges that businesses will inevitably face.

Hong Kong launches public consultation on additional spectrum in 4.9 GHz band

The Secretary for Commerce and Economic Development (SCED) and the Communications Authority (CA) have jointly launched a public consultation on the arrangements for assignment of an additional 80 MHz of spectrum in the 4.9 GHz band (4.80-4.96 GHz), a press release said. The consultation also aims to discuss the spectrum utilisation fee (SUF) for the provision of public mobile services.

Hong Kong amongst top four Tier-1 data centre markets

Hong Kong emerged as one of the top four attractive Tier1 markets for international investors, operators, and endusers, according to Asia Pacific Data Center Trends H1 report by CBRE Research.

CBRE adds that Hong Kong’s data centre market has been very active during the past 24 months, with 4 million sqft of space either being leased or transacted for redevelopment.

Driven by the growth in global mobile data traffic, Hong Kong’s total IT capacity increased by 27% YoY, to 379.6MW in Q1 from 299.9MW in Q1 2019, with over 215MW in the upcoming supply expected for the next few years.

Hong Kong’s yuppies, low-income groups still underinsured: report

Hong Kong’s young professionals and low-income groups are still underinsured despite the city having a low awarenessownership gap in life insurance, according to a Swiss Re report.

According to the study, Hong Kong has the lowest proportion of very high-gap households (6.6%).

Virtual banking knowledge remains moderate amongst Hong Kong customers

Although majority of banking customers in Hong Kong are now aware of the term “virtual banking”, the general understanding of what it really means remains moderate, a study by Nielsen found.

A total of 93% of banking customers surveyed indicated that they are aware of virtual banking. However, 42% have heard of the term but lack a strong understanding of it, whilst 38% were unable to correctly cite a virtual bank’s name.

Lands Department awards Tai Po site tender to Wealth Honour

The Lands Department has awarded the tender for a site at Tai Po Town has been awarded to Wealth Honour Limited on a 50year land grant at a premium of $3.71b, a press release revealed.

The site, Tai Po Town Lot No. 243 at Ma Wo Road in New Territories spans about 22,608 sqm and is designated for private residential purposes.

The minimum gross floor area and the maximum gross floor area are 43,584 sq and 72,640 sqm respectively.