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The Star
22-07-2025
- Business
- The Star
Economic Watch: Hong Kong sees equity market revival amid policy incentives, improved outlook
HONG KONG, July 22 (Xinhua) -- Hong Kong's benchmark Hang Seng Index closed at 25,130.03 points on Tuesday, hitting a three-and-a-half-year high. Analysts attribute this equity market revival to supportive policies, an improving economic outlook, and favorable valuations. Recent initiatives from the central government have boosted market liquidity. Upgrades to the Bond Connect, enhancements to the Cross-boundary Wealth Management Connect Scheme, and facilitative payment arrangements for Hong Kong and Macao residents purchasing properties in the Chinese mainland cities of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), have contributed to this positive momentum. The China Securities Regulatory Commission's efforts to optimize the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connects further reinforce Hong Kong's status as an international financial hub. Economist Leung Hoi Ming notes that China's position as the world's second-largest economy is expected to contribute about 21 percent of global GDP growth, providing solid support for Hong Kong stocks. Hong Kong consistently ranks as the world's freest economy, third among global financial centers, and maintains top positions in investment climate, international trade, commercial regulations, and air cargo. The Hong Kong Special Administrative Region (HKSAR) government's moves to streamline market listing procedures have helped boost initial public offerings (IPOs) by 30 percent year on year to 52 cases by mid-July. Total funds raised soared 590 percent to 124 billion Hong Kong dollars (15.8 billion U.S. dollars), making Hong Kong the biggest IPO market worldwide, HKSAR Chief Executive John Lee said in a social media post on Monday. The unique valuation advantage of Hong Kong stocks continues to attract both international and Chinese mainland investments. Recent data indicates a significant influx of southbound funds, reflecting renewed confidence among Chinese mainland investors. Carlson Tong, chairman of Hong Kong Exchanges and Clearing Limited (HKEX), mentioned that Chinese mainland companies currently listed in Hong Kong account for 81 percent of the total market value. The ongoing strength of Hong Kong stocks positively impacts both local and Chinese mainland capital markets, enhancing investor confidence and liquidity. Kevin Liu, chief offshore China and Overseas strategist at China International Capital Corporation, highlighted that active liquidity in the Hong Kong stock market is evident in an average daily trading volume of 240.6 billion Hong Kong dollars, showing a notable increase compared to the average daily trading volume in 2024, setting a historical high. Improved financing conditions are encouraging companies to list and refinance, particularly in high-growth sectors like technology and innovation. Since early 2025, driven by sectors such as AI, new consumption, and innovative pharmaceuticals, Hong Kong's market has even outperformed its global counterparts at times, said Liu. As the stock market rises, global interest in China's economy increases, promoting a virtuous circle of capital market openness and high-quality economic development, experts say. Leung believes that the stock market's rise reflects positive expectations regarding the fundamentals of the economy of the Chinese mainland, attracting more attention and investment from global capital. This influx brings more mature investment concepts and resources into the capital market, further optimizing its structure, he added. Meanwhile, experts emphasize the need for continued market optimization to attract long-term investment, noting that encouraging more quality companies to list in Hong Kong will deepen and stabilize the market, enhancing its appeal as a global capital platform. The HKSAR government will continue to improve the listing regime and boost market liquidity to attract more high-quality global companies to list in Hong Kong, Lee pledged earlier.
The Star
22-07-2025
- Business
- The Star
Enhancing economic resilience crucial in trying times
How should China strengthen the resilience of its economy? In April, the Trump administration announced a surge in global tariffs, triggering strong responses from governments around the world and causing sharp turbulence in financial markets. Within three days of the announcement, global stock markets lost over $9.5 trillion in market capitalization, and volatility intensified significantly across bond, foreign exchange and commodity markets. In the United States, stocks, bonds and the dollar all fell simultaneously. The yield on 10-year US Treasury bonds also posted its biggest weekly gain since the Sept 11, 2001 attacks. The shockwaves from the tariff moves continue to ripple across the world, with escalating confrontations on all sides. Faced with the Trump administration's high tariffs and erratic behavior, China must resolutely implement countermeasures. Any concession would only lead to further pressure from the other side. Only through firm resistance can space for negotiation and cooperation be created. On April 25, a high-level meeting for the first time proposed coordinating domestic economic work and international economic and trade struggles, aiming to use the certainty of high-quality development to cope with the uncertainty of dramatic changes in the external environment. On May 7, the People's Bank of China, the China Securities Regulatory Commission and other government authorities jointly introduced a package of incremental policies to stabilize market confidence. On May 12, China and the US released a joint statement after economic and trade talks in Geneva, in which the US agreed to remove some additional tariffs, and China reciprocated accordingly, temporarily easing tariff pressures. However, over the medium-to-long term, challenges in Sino-US economic and trade relations persist. It is worth noting that tariffs may not be the Trump administration's ultimate goal, but rather a bargaining tactic aimed at achieving the dual objectives of reducing the US trade deficit and maintaining the dominance of the greenback. In fact, since the onset of the trade conflict in 2018, the US government has been exerting significant pressure and imposing extreme restrictions on China in both trade and technology sectors. We must be fully aware of the worsening international economic and trade environment in the foreseeable future and recognize that China and the US will continue their strategic contest for a long time. So, against this backdrop, how should China enhance the resilience of its economy? We believe the most important approach is to focus on doing our own job well, remain self-reliant and persist in expanding domestic demand. At the same time, we must unswervingly expand high-level opening-up. Expanding domestic demand is the top priority for 2025. Following the directives from the Central Economic Work Conference in December 2024, expanding domestic demand became the top priority of economic work this year. This is because insufficient domestic demand is currently the main stumbling block in China's economy. In 2024, total retail sales of consumer goods grew by only 3.3 percent year-on-year, significantly lower than the 9.7 percent average between 2015 and 2019. From the perspective of the three engines of GDP — consumption, investment and exports — final consumption in 2024 contributed an average of only 2.3 percentage points per quarter to GDP growth, much lower than the 4.2-percentage point average between 2015 and 2019. Breaking down the three factors influencing household consumption — changes in income, wealth and expectations — we find that in the short term, the main constraint on consumption growth is the sharp slowdown in household income growth since the COVID-19 pandemic. In 2024, cumulative year-on-year growth in per capita disposable income was 4.6 percent in urban areas and 6.6 percent in rural areas, well below the 7.9 percent and 9.6 percent levels of 2019. Over the long term, two main factors constrain consumption: first, weak expectations and confidence about future employment and income; second, evident imbalances in income distribution across households, the government and enterprises, as well as within the household sector itself. Rising risk aversion among residents has led to an increase in precautionary savings, reflected in the sharp rise in new deposits and continued decline in new loans since 2022. In terms of income distribution, profits generated by enterprises have not been sufficiently transferred to households, and the income distribution within the household sector also needs improvement. Beyond the income gap between urban and rural residents, an even more important issue is the much wider gap in property and social security entitlements. To sum up, we believe that to stimulate consumption, macroeconomic policy stimulus is needed in the short term, while structural reform should be accelerated in the medium term. Based on the logic of moving from short-term stimulus to long-term reform, the following policy recommendations are proposed. First, a more proactive fiscal policy and a moderately accommodative monetary policy are keys to driving a rebound in China's nominal GDP growth. The main issue facing the Chinese economy is insufficient aggregate demand and a negative output gap. In the short term, to address the lack of domestic demand, central government finances should increase borrowing and spending to drive a rebound in consumption and investment. In addition to promptly implementing the expansionary policies outlined in the Government Work Report, additional stimulus measures should be planned for the second half, especially through greater issuance of special treasury bonds. To make full and effective use of proactive fiscal policy, we recommend accelerating the issuance of the remaining quota of local government special bonds and special treasury bonds in the second quarter, and issuing an additional 2 to 3 trillion yuan ($411.6 billion) in special treasury bonds for the year. Second, increasing short-term incomes for low and middle-income households through fiscal subsidies is advised. We recommend issuing universal consumption vouchers to encourage spending, especially among low and middle-income earners. To maximize the multiplier effect of consumption vouchers, they should be issued without being tied to specific products or services. Third, lifting asset prices from the bottom can also help restore consumer confidence. On real estate policy, housing prices in core areas of the largest cities should be stabilized promptly, and support should be given to leading well-managed private developers. All purchase and loan restrictions should be lifted to unleash demand from first-time and upgrading buyers. Special-purpose bonds should be issued to provide low-cost, long-term financing for high-quality developers. The government can also purchase idle commercial housing in second and third-tier cities and convert it into rental-based public housing. In the stock market, efforts should be made to cultivate a long bull market. In addition, with an aging population and slowing investment-driven growth, China's potential economic growth rate is trending downward. To reverse this trend and restore confidence among microeconomic actors, bold structural reforms are needed. These include reforms in income redistribution, education, healthcare, pensions, housing, development of a unified domestic market and support for private enterprises. The writer is deputy director of the Institute of Finance and Banking of the Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily. - China Daily/ANN
Yahoo
08-07-2025
- Business
- Yahoo
Shein files for Hong Kong IPO to speed up London listing, FT reports
Fast fashion giant Shein has confidentially filed for an initial public offering (IPO) in Hong Kong, the Financial Times reported on Tuesday. The Chinese-founded, Singapore-based retailer privately filed a draft prospectus last week with Hong Kong's exchange (HKEX) and sought the blessing of the China Securities Regulatory Commission, according to two people with knowledge of the matter. The application is a means for Shein to increase pressure on UK regulators as it seeks approval for its London listing. The firm filed to list in the UK capital around 18 months ago, but has since struggled to obtain the green light. Chinese and UK regulators have notably failed to agree on the language included in the risk disclosure section of its prospectus, particularly where this relates to human rights abuses. Shein faces claims that it sources cotton from China's Xinjiang region, where the US and NGOs have accused the Chinese government of forced labour and human rights abuses targeting Uyghur US banned imports from the area in 2021. In January, Yinan Zhu, a senior lawyer representing Shein, refused to say whether the firm was using cotton from Xinjiang when questioned by UK lawmakers on the Business and Trade committee. Related Consumer groups lodge complaint about Shein's online nudging with EU Commission France hands Shein €40 million fine for deceptive commercial practices The UK's Financial Conduct Authority approved a version of Shein's prospectus earlier this year, but it wasn't accepted by the China Securities Regulatory Commission. Hong Kong's exchange is expected to be more flexible than its UK counterpart when it comes to risk descriptions, although FT sources noted that London would still be the preferred listing location. Shein had originally sought to list in New York, although changed its plans in response to significant political opposition in the US, linked to its labour practices as well as national security concerns. Financially, Shein's IPO would provide a boost to the London market that has seen a number of recent defections. Delisted firms include Just Eat Takeaway, Wise, Ashtead and Flutter Entertainment. According to data from Dealogic, IPO fundraising in the UK market fell to at least a 30-year low in the first half of this year. Euronews has reached out to Shein for further comment. Sign in to access your portfolio
Khaleej Times
08-07-2025
- Business
- Khaleej Times
Shein files for Hong Kong IPO to save London listing
China-founded fast-fashion retailer Shein has filed for an IPO in Hong Kong to accelerate the listing process and pressure Britain's regulators to approve its planned London debut, the Financial Times reported on Tuesday. The company privately filed a draft prospectus last week with Hong Kong's exchange and sought a regulatory nod from the China Securities Regulatory Commission, the report said, citing people familiar with the matter. Reuters could not immediately verify the report. Shein did not immediately respond to a Reuters request for comment. Both the UK Financial Conduct Authority and the Hong Kong Stock Exchange declined to comment on the matter. Shein filed for a Hong Kong listing partly to pressure the UK regulator into easing its risk disclosure rules and to keep alive what could be London's biggest IPO in years, the FT report added. Reuters first reported in June that Shein was planning to file a draft prospectus confidentially for its Hong Kong listing, citing three sources with knowledge of the matter. Reuters also reported in May, citing sources, that Shein was working towards a listing in Hong Kong after its proposed London IPO failed to secure the green light from Chinese regulators. If UK's Financial Conduct Authority is willing to accept a China Securities Regulatory Commission-approved prospectus, London would still be Shein's preferred exchange, the FT report said.
Globe and Mail
08-07-2025
- Business
- Globe and Mail
Shein reportedly files for Hong Kong IPO to accelerate London debut
China-founded fast-fashion retailer Shein has filed for an IPO in Hong Kong to accelerate the listing process and pressure Britain's regulators to approve its planned London debut, the Financial Times reported on Tuesday. The company privately filed a draft prospectus last week with Hong Kong's exchange and sought a regulatory nod from the China Securities Regulatory Commission, the report said, citing people familiar with the matter. Reuters could not immediately verify the report. Shein did not immediately respond to a Reuters request for comment. Both the UK Financial Conduct Authority and the Hong Kong Stock Exchange declined to comment on the matter. Shein filed for a Hong Kong listing partly to pressure the UK regulator into easing its risk disclosure rules and to keep alive what could be London's biggest IPO in years, the FT report added. Reuters first reported in June that Shein was planning to file a draft prospectus confidentially for its Hong Kong listing, citing three sources with knowledge of the matter. Reuters also reported in May, citing sources, that Shein was working towards a listing in Hong Kong after its proposed London IPO failed to secure the green light from Chinese regulators. If UK's Financial Conduct Authority is willing to accept a China Securities Regulatory Commission-approved prospectus, London would still be Shein's preferred exchange, the FT report said.
