〈Asian Post, Jan 21, 2017〉Hong Kong and mainland stocks ended mixed yesterday as China reported faster than expected fourth quarter GDP growth while worries about possible interest rate rises in the United States weighed on the property sector.

The benchmark Hang Seng Index lost 0.71 per cent, or 164.05 points, to 22,885.91 points at the close, while the H-share index lost 0.78 per cent to 9,715.72 points.

Property developers and utilities firms retreated more than 0.8 per cent after US Federal Reserve chairwoman Janet Yellen said on Thursday that the central bank should gradually raise interest rates, noting the risk of the US economy overheating. The property sector led the decline as CK Property slumped 2.2 per cent to HK$50.95 per share.

Kunlun Energy was the best performer among the 50 blue chips, with its shares rising 3.2 per cent to HK$6.16. However, offshore oil producer CNOOC performed the worst, closing down 2 per cent to HK$9.80, after management forecast lower output and rising capital expenditures in 2017.

The Shanghai Composite Index added 0.7 per cent to close at 3,123.139 while the blue-chip CSI300 index rose 0.77 per cent to 3,354.89. For the week, the CSI300 gained 1.1 per cent, while the Shanghai benchmark was up 0.3 per cent.

Financials took heart after the People's Bank of China lowered the ratio of cash that banks must set aside as reserves, in an effort to ease seasonal liquidity tightness ahead of the Lunar New Year holiday. The health care sector was another strong gainer. The PBOC said on its official Weibo account that it has offered temporary liquidity facilities to some banks with a duration of 28 days. This will provide more effective liquidity transmission before the week-long holidays.

"We don't have to take the market moves on the Hong Kong bourse too seriously," said Alex Wong Kwok-ying, director from Ample Finance Group, adding that yesterday was mostly quiet as people are still awaiting Donald Trump's inauguration. "Apparently the mainland markets were not that sensitive about the inauguration as we can see they ended up higher," Wong said.

〈Macau Post, Jan 20, 2017〉The Head of Research at real estate firm Jones Lang Lasalle forecast yesterday that Chinese measures to curb capital outflows will affect the property market in Macau. However, he said that the policy will not last too long, as Beijing intends to globalize the use of the RMB.

The regional director and Head of Research of JLL in China expects the city’s property market, among other sectors, will be affected most by this recent policy

China ’s capital control policy may give headwind to the recovery of the city’s property market, even though the policy is expected to only be a short term one, said Joe Zhou, the regional director and the Head of Research of Jones Lang Lasalle (JLL) in China.

Recently, Mainland Chinese regulators announced the implementation of several measures to monitor the purchase of overseas properties by the country’s institutions. “I think the residential sector [of the Macau market] is going to be affected the most [by the policy], because there is a certain percentage of home buyers in Macau actually from Mainland China,” said Mr. Zhou.

The JLL regional head was the key speaker at a luncheon presentation entitled “The effects of Chinese investments on Macau property market” jointly organised yesterday by the American Chamber of Commerce in Macau (AmCham), the French Macau Business Association (FMBA) and the British Business Association of Macao (BBMA).

Speaking to reporters on the sidelines of the event, the property agent said the impact of the policy is already being seen in overseas markets.

“We [have] actually [heard] people from Mainland China complaining now that it’s really difficult to make a transfer of money [to outside the country], so now it’s impacting not only Macau, but it’s also impacting Hong Kong, it’s impacting U.K., and it’s impacting the U.S,” he said.

Nevertheless, he believes the policy will not last for long given the fact that the country ultimately aims to internationalise its currency, the renminbi.

“In the long-term, the Chinese government still wants the RMB to be internationalised. So it still wants to encourage Chinese investors to go overseas. This is the target,” the JLL research head claimed.

〈China Daily, Jan 19, 2017〉Hong Kong stocks retreated Thursday on investors’ concerns about the US Federal Reserve’s increasingly proactive stand on raising interest rates to nip inflation in the bud. Fed Chairwoman Janet Yellen was reported to have said that it “makes sense” to gradually increase interest rates so as to minimize the risk of a “nasty surprise down the road — either too much inflation, financial instability, or both”.

Her statement was seen to contradict earlier market presumptions that the Fed would take reactive, rather than preemptive, action on changing circumstances brought about President-elect Donald Trump’s professed expansive economic policy to stimulate growth. Trump’s inauguration will take place on Saturday morning, Hong Kong time.

Stock analysts worry that an overly aggressive Fed interest rate policy could short-circuit the market rally which has been fueled by expectations of tax cuts, increased public sector expenditure, deregulation and, yes, demand-driven inflation. Expectation of a faster-than-expected pace in interest-rate hikes in 2017 hit property stocks in Hong Kong. Yellen’s talk came at a time when the major developers were keen on unloading their large inventories of newly completed apartments. Concern about rising borrowing cost could discourage many prospective home buyers from taking the plunge.

To be sure, sluggish sales aren’t going to pose much of a threat to the financial structures of the cash-rich developers. But over time, the build-up of unsold apartments could result in a supply glut that could seriously depress developers’ earnings in 2017 and beyond.

Meanwhile, the major banks continued to do well. Bucking the market trend, HSBC and Bank of China (Hong Kong) made gains. The local banks that derive a large portion of their earnings from mortgage financing, including Hang Seng and BEA, didn’t do so well, as expected.

Some stock analysts maintained that concern over interest rates isn’t going to have a long-lasting effect on the market, which has already discounted the possibility of faster and larger rate hikes in 2017. Nobody really expects the Fed would remove the punch bowl before the market gets overly rowdy.

〈The Standard, Jan 19, 2017〉The US investment bank cited negative factors that will pressure the housing market - notably the increase in interest rate, surge in supply of new flats and the government's cooling measures. Meanwhile, Cheung Kong Property will launch six residential projects involving a total of 2,065 new flats.

They are: Seanorama in Ma On Shan (454 flats), a still unnamed project on Oil Street in North Point (378 flats), the first phase of Ocean Pride in Tsuen Wan West (970 flats), Repulse Bay project (11 flats), Crescendo in Ngau Tam Mei (67 flats) and a development on Graham Street in Central (185 flats).

Executive director Justin Chiu Kwok-hung said Cheung Kong will actively launch the projects this year, but the pace will depend on progress in the approval of pre-sale consent. He said he expects stronger sales this year than in 2016. Cheung Kong has obtained the government's pre-sale consent for its Crescendo project and its new development on Oil Street in North Point, and both will be launched in the first quarter.

Chiu said Chief Executive Leung Chun-ying's policy address was comprehensive and he supports the government's plan to increase land supply to boost Hong Kong's development. He described the property cooling measures as "special policies for special moments" and hopes they will not become the "new normal."

Chiu expects local home prices to adjust within a 10 percent range this year.

Meanwhile, Henderson Land general manager Thomas Lam Tat-man said the group plans to launch five residential projects and two commercial projects this year.

The residential developments are: the Queen's Road West project in Sai Wan (650 flats), Mansion Street project in North Point (about 460 flats), Tin Wan project in Aberdeen (about 140 flats), Tai Tong project (about 60 flats) and Tong Yan San Tsuen project in Yuen Long (about 16 flats).

He added that Henderson Land sold about 1,523 properties last year and reaped about HK$20 billion. Central Property Agency said commission income from its residential department last year was about HK$3.4 billion, a record for the agency.

〈Asian Post, Jan 18, 2017〉The Hong Kong Special Administrative Region (SAR) government aims at expediting the increase of housing supply and seeking a balance between land development and conservation, Hong Kong SAR Chief Executive Leung Chun-ying said Wednesday. Starting the chapter on housing and land use in his 2017 policy address, Leung pointed to expediting and increasing supply as the "ultimate solution" to Hong Kong's various housing-related issues.

"The housing problem in Hong Kong boils down to land use, which is not a technical issue, but a conceptual one," Leung said, suggesting re-examining Hong Kong's land use planning in a "serious, scientific and objective manner," so as to increase land supply and lower the levels of land premium, property prices and rentals.

According to the address, in the next five years, estimated public housing production by the Hong Kong Housing Authority and the Hong Kong Housing Society will be about 94,500 units. The Hong Kong SAR government's housing supply target for the next decade starting 2017-2018 is 460,000 units, including 200,000 public rental housing (PRH) units and 80,000 subsidised sale flats.

On private housing, the projected supply of first-hand residential properties for the coming three to four years was 94,000 units. This is 45 percent higher than the figure at the beginning of the Hong Kong SAR government's current term, and a record high since the regular release of supply statistics 12 years ago.