〈China Daily, July 1, 2017〉The dramatic surge in the tally of Chinese mainland companies floated in Hong Kong in the past two decades has led to a significant shift in the city’s traditionally property sector-reliant stock market, providing a more diversified structure with capacious choices for local and foreign investors.

Market pundits concur with the fact that mainland enterprises have been making a positive contribution to the stability and growth of the local economy, as well as cross-boundary integration, and will continue to promote a “win-win” scenario for both Hong Kong and the mainland by exploring new business opportunities under the framework of national strategies.

“There has been a radical change in these 20 years regarding the quantity of mainland companies listed in Hong Kong. Twenty years ago, only big State-owned enterprises got listed here, such as Beijing Enterprises Holdings, but now many private and local-government-owned companies from the mainland have gone public in the local stock market,” noted Ginger Cheng Sze-ching, head of Hong Kong and mainland corporates at DBS in Hong Kong.

Statistics show there were 1,013 mainland enterprises listed in Hong Kong as of March this year, accounting for 50.4 percent of the total number of listed enterprises, and 63.7 percent of total market capitalization. In comparison, there were just 83 mainland companies listed in Hong Kong 20 years ago, accounting for merely 8.5 percent of total market capitalization.

Along with the mainland’s rapid economic development, it’s noted that the quality of mainland companies has also gone up substantially, with many of them having gained popularity among local and overseas investors.

Tech behemoth Tencent Holdings Ltd, one of the most sought-after mainland enterprises, became a Hang Seng Index constituent company in 2008 — four years after its flotation. Its share price has soared nearly 300 times over its IPO price, with a market capitalization of HK$2.6 trillion, making it one of the five most influential companies listed in the SAR.

“Hong Kong, as a global financing hub, is the primary choice of mainland companies when it comes to raising funds, due to its free flow of capital, access to international and institutional investors, and a great pool of talents and expertise. At the same time, Hong Kong’s stock market, which had largely banked on property companies in the past, now offers a much more diverse environment,” said Tom Chan Pak-lam, chief executive officer of Success Finance Group and vice-chairman of the Institute of Securities Dealers Ltd in Hong Kong.

〈Asian Post, July 1, 2017〉Hong Kong's residential property prices rose at the slowest monthly pace in four months in May, as the prospect of interest rates going up and the imposition of a higher government stamp duty in April finally began to have an impact.

Home prices in May rose 1.15 per cent, slowing from April's 2.55 per cent increase, data from the Rating & Valuation Department showed. A home price index for the secondary market rose for the 14th consecutive month to 333.1 in May, from 329.3 in April.

Average home prices were 20.8 per cent higher in May than a year ago, a record level, putting Hong Kong at the top among the world's major cities.

Steep home prices is one of biggest challenge facing incoming chief executive Carrie Lam Cheng Yuet-ngor and her cabinet members. The new team will take over amid an uptick in interest rates by the Hong Kong Monetary Authority, which implements a monetary policy tied to that of US Federal Reserve as the Hong Kong dollar is pegged to the greenback.

"Home price growth will continue to ease," said Thomas Lam, senior director at Knight Frank. "I expect the new government will issue new curbs to cool the market while the Hong Kong Monetary Authority will take action first."

On April 12 the government closed a loophole that allowed buyers of multiple properties to put the purchases on a single contract, which subsequently forced them to pay a 15 per cent stamp duty on each property.

This was reinforced by the HKMA's tighter mortgage rules, requiring buyers to put down more money for properties, while reducing available loans.

Four weeks after the new policies came out, the incline in home prices has begun to taper off. Centaline Property Agency's latest Centa-City Leading Index, which reflects sales at 100 large housing estates across the city, recorded its first weekly decline after rising for 19 consecutive weeks. The index eased 0.48 points to 159.12 in the week ending June 18 from a week earlier.

〈Asian Times, June 30, 2017〉By expanding into other industries and geographies, the city's wealthiest have managed to build on past successes and continue to grow their billions over the years.

Where and how fortunes were made very much charted how quickly they grew their billions in the two decades since Hong Kong returned to Chinese power in 1997. Just as the property business was the mainstay of their rise and success in the 1980s and 1990s, diversification into other industries and geographies became key to their ever-growing wealth.

No other tycoon exemplifies the change as well as Li Ka-shing, Hong Kong's richest man. Li's estimated net worth tripled to US$30.3 billion this year from US$11 billion in 1997.

The Li family's flagship, CK Hutchison Holdings, owns businesses ranging from telecommunications networks to container ports, power plants and retail stores all over the world. It earned 59 per cent of its HK$62 billion in pre-tax profits from core operations in Europe, 15 per cent from Hong Kong and the mainland, 5 per cent from Canada and 19 per cent from the rest of the world.

"Li's outshining of the rest of the pack has a lot to do with his empire's diversification outside the property sector and its overseas expansion strategy," Jun Yang Securities chief executive Kenny Tang Sing-hing says.

"It leveraged a lot from its acquisition of Hutchison Whampoa, whose British and international management talent were key to its later success in overseas expansion."

Between 1979 and 1980, Li bought more than 40 per cent of the then debt-laden Hutchison Whampoa, one of the leading trading companies that can trace its history to a dockyard in 1863. Over three decades, Li turned the company into the world's leading port operator with 52 locations, one of Hong Kong's biggest developers, the largest international health and beauty product retailer in Asia and Europe, a major international infrastructure investor and a mobile telecommunications operator in Asia and Europe.Li's outshining with the rest of the pack has a lot to do with his empire's diversification outside the property sector and its overseas expansion strategyKenny Tang, Jun Yang SecuritiesThe contrast could not have been more stark next to Henderson Land Development and Sun Hung Kai Properties, two developers that earn most of their revenues from Hong Kong and the mainland.

〈Business Times, June 29, 2017〉Hong Kong holds the dubious honour as the world's least affordable city when it comes to buying a home, but many property industry veterans firmly believe you can do no wrong in getting a place here.

Home prices have surpassed their 1997 peak by 40 per cent, and this has prompted the government to roll out no fewer than three cooling measures in seven months, from a 15 per cent stamp duty to credit tightening. So far, they have done little to arrest the price surge.

"The government's relative caution comes after some painful lessons from previous landslide declines in home prices," says Buggle Lau Ka-fai, chief analyst at Midland Realty, referring to how the property market had taken it right on the chin during the worst days of the global economic crises.

After the 1998 Asian financial crisis led to a huge overhang, the government stopped selling land by direct auction. Instead, developers would submit bids and if they hit 80 per cent of the government's confidential reserve price, an auction would be triggered. That way, the theory went, land valuations were more stable. But that led to a reverse problem of tightening supply that pushed prices up absent other factors. This way of allocating supply was only changed in 2013 when the government switched to selling all land plots by tender in an attempt to manage skyrocketing prices.

But demand is the other febrile side of the equation. During the 2003 severe acute respiratory syndrome outbreak, for example, home prices plunged as much as 70 per cent from their 1997 peak, saddling 105,697 homeowners with negative equity where homes were worth less than their outstanding mortgages.

However, the rebounds have been equally sharp since then, due largely to economic stimulus measures by Beijing.

Cases of negative equity were effectively eliminated as of March, according to Hong Kong Monetary Authority data. With prices now back at a record, international property consultant JLL has revised its 2017 price growth forecast upwards, from zero to 5 per cent, to a range of 10 to 15 per cent.
Home prices rose 5.7 per cent in the first four months to April, according to data from the Rating and Valuation Department. Sales of new flats continue to create high expectation of further price rises in coming months," Denis Ma, head of research at JLL, says.

〈The Global, June 29, 2017〉As flat prices soar, incomes fall further behind and the wait for public housing climbs to more than four years, Shirley Zhao and Naomi Ng examine the desperate search for living space

A small patch of land of about 300 sq ft is hidden in an obscure alleyway in a trendy part of Central, surrounded by old walk-ups and wire fences. It is designed to be a pocket park for pedestrians to rest in, but it looks like a prison cell. Angil Ng, a 72-year-old security guard, is half an hour early for his shift and sits on the bench reading a newspaper as the pipes, ventilation fans and cooling systems give off a rather industrial buzz.

"The park is a bit like Hong Kong," Ng says. "You are like in jail no matter at home or outside." Over the past two decades, the city has grown into the most expensive place to buy a home and second only to San Francisco as the most expensive to rent, according to Deutsche Bank, while flats are becoming smaller.

Critics blame the government, accusing it of withholding land supply during the market downturn, not paying any effort to improving the quality of public facilities and failing to support the development of social sector housing.

"If there is any time in the history of post-handover Hong Kong when meaningful changes can happen, it is now," says Lai Kin-kwok, convenor of the Platform of Concerning Subdivided Flats. "It's the 20th anniversary of the handover and a new government is taking over."

Gloom had filled the air in 2003. Property prices had buckled by 62 per cent since their handover high under the weight of the Asian financial crisis and severe acute respiratory syndrome. To prop up the market, Donald Tsang Yam-kuen, who was then chief executive, introduced measures such as scrapping regular land sales, slowing the construction of public rental housing and suspending the supply of subsidised flats for sale.

Until 2010 the only form of land sale was initiated by developers under the application list system, in which they would submit sealed offers for sites on the list. An auction would be triggered if an offer reached about 80 per cent of the government's undisclosed reserve price.