A string of Hong Kong stocks suddenly plunged Tuesday, with traders
pointing to links between some of the companies and a brokerage that's
under regulatory investigation.
Sixteen firms tumbled by more than 40 per cent as of 2.46pm, losing a combined HK$42 billion (S$7.47 billion) in market value. China Jicheng Holdings Ltd, an umbrella maker, and GreaterChina Professional Services Ltd sank more than 90 per cent. Lerado Financial Group Co., whore shares were halted by Hong Kong's securities regulator this month, has previously disclosed an investment in China Jicheng and an underwriter role on a GreaterChina share placement in 2015.
The broader Hong Kong market was resilient to the declines on Tuesday, with the benchmark Hang Seng Index losing 0.1 per cent and the Hang Seng Composite Small Cap Index sliding 0.4 per cent. Still, the picture looked more grim on the city's small-cap Growth Enterprise Market, which is home to some of the plunging shares.
The S&P/HKEX GEM Index sank 9.6 per cent, its biggest retreat since August 2015, and closed at its lowest level on record. The gauge has lost more than 90 per cent since 2000.
More news, Hong Kong small cap stock plunge wipes out HK$42b in value
Source :
1) www.businesstimes.com.sg
2) www.bloomberg.com
The wealth gap in Hong Kong has becoming a great issue in recent times. If you do a google seach, there are few reported news in the past few years.
Firstly, I would like to share some interesting statements from a news reported about a year ago. It was an interview with Hong Kong's richest man - Li Ka-shing conducted by Bloomberg Television's Angie Lau. His first interview with international media since 2012.
As noted below.
Hong Kong's richest man called for higher corporate taxes to help teckle wealth inequality and urged the government to think of ways of countering rising discontent among its younger residents by providing them with more opportunities.
"Tax companies an extra one or two per cent, then a lot of the poor would benefit"
Unlike Mr Buffett and Mr Gates, Mr Li opposed the idea charging higher tax rates for the rich.
"You mustn't tax some people more and some people less or else it's chaos," he said.
More news, Hong Kong's richest man calls for higher tax to ease wealth gap
Coming back to our post title.
Here are some interesting statements extracted from the recent news article.
Originally intended to stimulate entrepreneurial dynamism, the hands-off approach may have ended up having a perverse effect, allowing a few large companies to entrench their positions and ultimately stifle competition. Charges of collusion between business and government have felled several officials and led to public discontent.
Debates about Hong Kong's rich and poor tend to come back to one word: land.
Almost all the city's richest people largely owe their fortunes to real estate development. The wealthiest is Li, whose Cheung Kong Property Holding's Ltd. posted HK$18 billion in underlying profit last year. The runner-up is Lee, whose Henderson Land Development Co. made HK$14.2 billion. The assets of the 10 wealthiest people now equal 48 percent of Hong Kong's economy.
They've thrived within a peculiar system in which the Hong Kong government. which technically owns all available land, auctions off long-term leases to developers, some of whom are indirectly on both sides of the exchange, Hong Kong's political leader is selected by a 1,200-member committee of notables, including Li and Lee, and others made wealthy by the system. This is part of why tycoons have an advantage.
More news, Life in Hong Kong Is Harder Than Ever - Unless You're a Tycoon
Food for thought.
Source :
1) www.bloomberg.com
2) www.businesstimes.com.sg
