Business

Top banks anticipate intra-Asian trade to grow triggered by the "China plus one" strategy at Tuesday's global financial leaders' investment summit held in the nation's offshore financial centre. “The China-plus-one strategy has formed a virtuous circle and brought opportunities among Asia, and ASEAN, as China's largest partner, has benefited regionally,” said Georges Elhedery, the chief executive officer of HSBC, in the Hong Kong Global Investment Summit, organised by The Hong Kong Monetary Authority.  The “China Plus One” Strategy, where investors avoid investing in China only but also invest in its neighbourhood to hedge against tariffs and geopolitical conflicts, could increase the intra-Asian trade by 65% this year, as estimated by Elhedery. According to China's General Administration of Customs, China's imports and exports to ASEAN grew by 10.5% in the first half of 2024, making it the number-one trading partner for the fourth consecutive year. Meanwhile, China also accounts for around 50% of the Foreign Direct Investment in ASEAN countries, according to Elhedery. “The opportunities in ASEAN are vast and varied, and as a large trade bank, (we view) the Asian market is very important to us, especially the Chinese market,” said Bill Winster, the chief executive officer of Standard Chartered. The expanding trade corridor between China and Southeast Asia meant more opportunities for the bank, said Winster. However, Huang Yiping, the Dean of the National School of Development of Peking University,  said that although the Chinese government's policies are “aggressive enough”, it should do more to boost its economy. In September, the Chinese government revealed a series of stimulus policies towards the nation’s sluggish property market, including trimming the lending rates, mortgage rates and down payments with facilities for institutional investors on the stock market. “China will run out of the advantage of low cost and the population ageing in …

Hong Kong’s virtual banks need more regulations that would make them more competitive compared to the conventional brick-and-mortar banks, the experts said on Tuesday. Digital banks, which deliver banking services exclusively or primarily through the internet or other forms of electronic channels, are subject to the same set of regulatory requirements that apply to traditional banks according to HKMA. The eight licensed digital banks of Hong Kong together gained HK$49.9 billion in assets last year, which accounts for only 0.3% of the total market shares, according to the HKMA’s data. Total deposits of the eight banks amounted to 2.2 million at the end of 2023, accounting for 8.8% of the total depositors in Hong Kong and reported zero profits according to HKMA. Paul Tang, the chief operating officer of Payment Asia, echoed the proposal that virtual banks need more pertinent regulations to support their business expansion in the short term. "The investment cost of virtual banks is high in the early stage, while the operation mode is also different from traditional banks," said Tang. The virtual banks in Hong Kong were established with the mission of stimulating more innovations, fintech adaptations, and competitiveness. Nonetheless, all eight licences haven't started to make profits and have to follow the exact requirements as brick-and-mortar banks, according to the city's de facto central bank. Virtual banks, such as Air Star, provide up to 6.88% of annual interest rates, offering higher interest rates to attract people's deposits. "Digital banks are different from traditional banks, so old ways don't fit. Only with new policies can digital banks leverage their unique advantages," said Oliver Hughes, Head of International Business at TBC Bank Group, highlighting that virtual banks in Hong Kong expect new regulation to support them as they compete with traditional banks. "We try to remove that …

Hong Kong's stock market twisted the six-day increase and closed lower as China’s central bank slashed the short-term rate after the US interest rate eased the yuan’s pressure. The Hang Seng Index edged down by 0.06% to 18,247.11 at the close, snapping the six-day streak to last Friday, and the Hang Seng Tech Index decreased by 0.15% due to the drop in mainland electric vehicle stocks. XIAOMI-W Holdings jumped by 3.37% to HK$20.55 after announcing the official launch of the latest Redmi Note 14 series on Sept. 26. Chinese Aoyuan Group surged by 126.89% as the UAE-based investment firm, Multi Gold Group, became its main shareholder. The Chinese Biotech company Wuxi AppTec dropped by 3.65% at the close, and WuXi Biologics, its subsidiary, slipped by 5.08%. CHINA RES Power Group rallied 3.33% to its five-day high of HK$19.84 after the company published its financial report. LENOVO Group surged 2.56% to HK$9.63, and GEELY AUTO Group added 2.11% to HK$10.18 on its first trading day after launching its new car last Friday night. “The cut of US interest rate last week made Hong Kong’s stock gain rapidly,” said Herald van der Linde, the head of equity strategy, Asia Pacific at HSBC.“But this week, as initial excitement and confidence at first hearing the interest rate cut have passed, people are considering whether the market could meet their expectations.” Financial Secretary Paul Chan Mo-po reminded investors the pace of cuts in the prime rate used by commercial banks ‘may be slower’ than those in the US on Sept. 19. The People’s Bank of China cut the 14-day reverse repurchase rate to 1.85% from 1.95% on Monday to maintain the liquidity of the banking system, according to the statement on its website. The weak outlook of the US economy leads to the interest rate …