Hong Kong-Guangdong Business Conference in Sydney

On October 27, 2009, Hong Kong-Guangdong Business
Conference was held in Sydney.
At the event, both Guangdong and New South Wales
(Australia)
leaders were calling for greater cooperation in business and trade.

At this 1-day conference, Governor of Guangdong
province Huang Huahua told that the delegation came to Sydney in order to
implement the agreed consensuses to work closer in time of trouble and seek
common development, as well as to push forward the implementation of the investment
trade and cooperative projects, focusing on mutual cooperation in a wider field
and higher level. The delegation consisted of Hong Kong and Guangdong government officials.

It was noted at the conference that Guangdong
is the 1st province of China’s reform and opening up with a long history of
friendly exchanges with Australia
For example, 30 years ago, the leaders of Guangdong
and New South Wales of Australia established a friendly sister-province
relationship, and, since then, Guangdong and Australia have
had good growth in bilateral trade. In 2008, trade volume between Guangdong and Australia reached USD 8.14 billion,
which accounted for 1/8 of the Sino-Australian trade.

On the sidelines of the conference, 27
cooperative agreements with trade value of USD 3.19 billion were signed by the
representatives of Guangdong
delegation and local business companies.

Filed under: International Business Environment

HKMA takes measures regarding RML

In accordance with a press release that was published by the Hong Kong Monetary Authority on October 23, 2009, prudential measures have been taken for residential mortgage loans (RML).

On October 23, the HKMA issued a circular to banks in Hong Kong in order to provide guidance on loan-to-value (LTV) ratios for
residential mortgages on properties valued at $20 million or
more. The LTV ratio will be
capped at 60% for residential
properties valued at $20 million or more. As to properties valued at below $20 million, the
70% LTV ratio will be maintained while the maximum loan amount
will be capped at $12 million.

The above-mentioned measures will come into effect immediately. However, there will be a grace period for
purchasers with already signed provisional sale-and-purchase
agreements on or before October 23, 2009 – within one month, such purchasers will
still be able to apply for
mortgage loans up to 70% LTV ratio.

The circular issued by the HKMA reminds banks to be prudent when conducting
valuation of properties and calculating borrowers’ debt
servicing ratios. Banks should consider the
effect on borrowers’ ability to service mortgage payments when
interest rates
return to "normal" levels (currently they are at historically low levels).

According to the Chief Executive of
the HKMA, Mr Norman Chan, "These are prudential measures
designed in the interest of maintaining banking stability, to
enhance banks’ risk management on mortgage lending to high-end
residential properties.  The lower LTV ratio for high-end
properties will be helpful to banks in the management of the
credit risks in lending against such properties." 

Filed under: Banking Services

Hong Kong and Malaysia to Sign Memorandum on Islamic Finance

On
October 23, 2009, a Hong Kong official said that Hong Kong will
sign a memorandum of understanding (MOU) with Malaysia. This
memorandum will pave to way for Islamic financial services in the
city.

According
to Roger Tam, a spokesman for Secretary for Financial Services and
the Treasury Ceajer Chan, this move will boost the development of
Islamic finance in Hong Kong.

Tam
said that the government of Hong Kong will also promote its plans to
revise the tax rules governing the sale of Islamic financial products
in order to make them more attractive to investors.

The
document is to be signed in 2 weeks.

Filed under: HK as a Financial Centre

Hong Kong may stop Mortgage Insurance for investment properties

The Hong Kong Mortgage Corporation may end a programme offering
mortgage insurance for investment properties because Hong Kong’s
central bank makes efforts to prevent a real estate bubble.

Prices on property in Hong Kong
have rallied on record- low interest rates during 2009. According to the Land
Registry, sales of luxury homes worth more than USD 1.3 million almost tripled
in September. On October 14, Hong Kong Chief Executive Donald Tsang signaled that his government may release more land
for developers.

Peter Churchouse, chairman of property investment firm Portwood
Capital, said that Hong Kong is not in a
bubble yet, and added that “high-end luxury is where the concern really is” but
that represents 5-10% of the market.

On October 21, Hong Kong’s
6-member Hang Seng Property Index rose 0.7% to 30,227.66, which is a new high for 2009 that has it up 78% year
to date. The benchmark
Hang Seng Index was up 55% for the year 2009 by this break.

Due to mortgage insurance, home buyers are allowed to
borrow beyond 70% of the property’s purchase price. Home-loan insurance for
investment properties accounts for about 1% of overall mortgage insurance
programme in Hong Kong.

Filed under: HK as a Financial Centre

HK Exchange approves Jersey corporate listings

The Hong Kong Stock Exchange has approved Jersey companies for listing. This move is a significant development for Jersey’s finance industry as it is intending to increase business flows from the Asia Pacific region. Also, it is worth mentioning that this confirmation came only days before a delegation from Jersey undertook its latest visit to the region.

Jersey companies were formally included on the Hong Kong Exchange’s approved list as a result of more than a year’s negotiation, research and document preparation that involved Jersey’s government officials, representatives from Jersey Finance as well as the finance industry.

Due to the approval, Jersey’s finance industry is enabled to compete on an equal footing with other competitor jurisdictions having established longer in Asia.

The Jersey delegation began its week-long visit to Hong Kong, Singapore and mainland China on October 15, 2009.

Filed under: HK as a Financial Centre

HK resident wins Nobel prize in Physics

Charles Kao Kuen has become the 1st Hong Kong-linked person who has won the Nobel Prize.

Shanghai-born Charles Kao Kuen, the former vice chancellor of the Chinese University of Hong Kong shares the 2009 Nobel Prize in Physics with two Americans – Willard Boyle and George Smith – for pioneering ”masters of light” work on fiber optics and semiconductors.

On October 9, 2009, the Nobel jury in Stockholm said that this year’s Nobel Prize in Physics is awarded for 2 scientific achievements “that have helped to shape the foundations of today’s networked societies”.

76-year-old Kao has British and US nationality but has been based in Hong Kong. According to the Nobel jury, he was awarded half of the prize for “groundbreaking achievements concerning the transmission of light in fibers for optical communication”. His discovery means that ‘text, music, images and video can be transferred around the world in a split second.

Filed under: News and politics

HK signs MOU for Islamic Finance Cooperation with Malaysia

The Hong Kong Monetary Authority (HKMA) has signed a memorandum of understanding with Bank Negara Malaysia. The newly signed document is aimed at working closely in the development of the financial services industry, particularly Islamic finance.

The representative of both Hong Kong and Malaysia are aimed at a long-term strategic partnership. They agreed to facilitate and promote the development of financial market infrastructure through the exchange of information and developing legal, regulatory and supervisory frameworks for Islamic finance.

HKMA and Bank Negara Malaysia agreed to promote cross-border financial activities through working on standards and documentation relating to Islamic finance transactions. Also, they intend to further the consistent application of Islamic financial contracts for cross-border transactions.

According to the Chief Executive of the HKMA, Joseph Yam, the signing of this memorandum marks the beginning of a new area of co-operation between the parties and reflects the joint commitment to further developing the Islamic finance industry.

Filed under: HK as a Financial Centre

New Zealand’s Minister to visit HK

On October 4, New Zealand’s Finance Minister Bill English leaves for Hong Kong and London with a view to raise the country’s profile with investors and business groups as well as to share ideas about the next steps in economic recovery. This trip follows a similar visit to Tokyo and New York in September and will last for 6 days.

During his 2 days Mr. English will spend in Hong Kong, he will call on Hong Kong Monetary Authority (HKMA) Chief Executive Norman Chan and Hong Kong SAR Chief Secretary for Administration Henry Tang, and speak to the New Zealand Chambers of Commerce in Hong Kong and meet investors.

Filed under: International Business Environment