Holiday news 3: Hong Kong, Macau & Taiwan

When I was a junior investment analyst in the early 1980s, my Head of Research sent me to a seminar on construction in Hong Kong. At this event, one of the speakers quipped that “the concrete never sets in Hong Kong”. I thought, “yeah right”; but some 30 years later – it is still true.

The Hong Kong stock market is no slouch either and although it had a pedestrian 2010 with a gain of 5.3% in the Hang Seng (after 2009’s supernova of +52%), a record number of shares was traded at 34.99 trillion shares for the year as a whole. Average daily trading volume also reached a record 140.53 billion shares and both tallies beat 2008’s high: 27.1 trillion shares in total; and average daily volume of 110.63 billion. The City also completed its biggest ever year for IPOs with HK$789.5 billion ($102 billion) raised. And, this included the largest one-off with AIA Group’s $20.5 billion IPO in October. Looking forward, PwC is forecasting as much as HK$350 billion ($45 billion) - a diminution of around 20% - this year with 110 listings.

Finally, the domestic real estate continues to shadow that of the PRC i.e. despite Government action to restraint it, activity remains stubbornly buoyant.

Not far away in Macau, the World’s largest gambling centre (since 2006 when it edged out Las Vegas) enjoyed a bumper December with a 66% rise in revenues to Pactacas 18.9 billion ($2.36 billion). In 2009, annual revenue rose 58% to Pactacas 188.3 billion and when the data are finalised, 2010 looks set to have risen a further 10%. Macau’s visitor arrivals rose 15% to 22.7 million in the first eleven months of 2010, with more than 80% coming from the PRC and Hong Kong; including a 20.5% increase in tourists from the PRC.

Finally, the climate between Taiwan and China continues to warm up and, from today, China will cut duties on 557 items imported from Taiwan including fish and bicycles. Meantime, Taiwan will lower tariffs on 267 items such as tea and cement from the PRC as part of the “early harvest” accord.

“Hong Kong has created one of the most successful societies on Earth” - Prince Charles

Holiday headlines

• Hang Seng sees longest winning run since November
• Hong Kong share trading at new record level in 2010 due to IPOs and concerns about China’s polices
• IPO’s in Hong Kong forecast to dip this year by 20% - but should still be worth HK$350 billion, says PwC
• Hong Kong to build 15,000 public sector housing units a Year, says RTHK, the TV station
• Macau’s December casino revenue estimated to have risen 66% to $2.36 billion on China patrons
• China and Taiwan institute tariff cuts as relations warm