Premium Essay

Capital Markets of Philippines vs. Hong Kong

In: Business and Management

Submitted By gregscorporal
Words 13954
Pages 56
I. Overview of the Hong Kong Capital Market

Located in the heart of Asia, Hong Kong positioned itself to be a major international financial center of the continent. Its capital market is comprised of integrated network of institutions and markets which provide a wide range of products and services to local and international customers and investors. Hong Kong’s financial markets are characterized by a high degree of liquidity and operate under effective and transparent regulations, which meet international standards.
The Government of the Hong Kong Special Administrative Region (HKSAR) abides by the principle of keeping intervention into the way in which the market operates to a minimum and has endeavoured to provide a favorable environment in which business operates. Its policy of low and simple taxation allows maximum room for business initiatives and innovation. There is a strong emphasis on the rule of law and fair market. There are no barriers of access to the market by foreign businesses and no restrictions on capital flows into and out of Hong Kong.
Hong Kong’s privileged location in the Northeast Asia, on the other hand, makes it a gateway to China. Moreover, Hong Kong is situated at appropriate time zones that allow 24-hour continuous trading of foreign exchange and gold when the two markets in New York and London are closed.

II. Financial Players and Intermediaries in Hong Kong
Preview:A closer look at the financial markets

As of July 2010, there were 146 licensed banks, 22 restricted licence banks, and 27 deposit-taking companies in Hong Kong, together with 70 local representative offices of overseas banking institutions. These institutions come from 34 countries and include 70 out of the world’s largest 100 banks. Together they operated a comprehensive network of about 1,390 local branches, excluding their principal place of business in…...

Similar Documents

Premium Essay

Challenges in Investing in the Property Market of Hong Kong

...whole life in order to live in peace and enjoy work. Hong Kong, which is the well known international city, has a great deal potential to attract investors. Not only the openness of property market can attract many local investors as well as mainlanders, but also its proximity and accessibility. However, the constant increasing and soaring price in property market of Hong Kong actually are vital challenges for most investors. In this paper, I will examine the problems and its causes about the challenges in investing in the property market of Hong Kong. Then, I will suggest several possible solutions and conclude by presenting my own opinion on the topic. One of the huge problems for almost investors who want to invest the real estate market of Hong Kong is about its price. The property price of Hong Kong is particularly expensive. It even creates the most expensive property transaction in the world during November 2009, which needs over four hundred millions to buy a one department (Business Times, 2009). Besides, the property price also has been increasing constantly. For example, there is almost thirty percentages increasing of mass-market prices in 2009 (“Lending”, 2009). Since the highest property price, a problem of liquidity bubble seems has a great chance to happen. It implies that the risk of having negative assets will be increased. Therefore, the investors need to face a harsh investment environment in Hong Kong. The cause behind the problem is the city’s......

Words: 770 - Pages: 4

Premium Essay

Minimum Wage in Hong Kong

...Minimum wage in Hong Kong Table of Contents 1. Part 1: Minimum Wage law in Hong Kong 2 2. Introduction 2 3. Minimum Wage – Economic Theory 2 4. Introduction in Hong Kong – May 2010 3 5. Impacts – 15 months later 5 5.1. Employment 5 5.2. Firms profitability 6 5.3. Inflation 7 6. Economic cycle considerations 9 7. Part 2: Housing issues in Hong Kong 9 8. Introduction 9 9. Housing situation in Hong Kong 9 10. Housing Demand in Hong Kong 11 11. Housing supply in Hong Kong 14 12. The Current Government Policies 15 12.1. Policy 1: 15 12.2. Policy 2 16 12.3. Policy 3 16 13. Conclusion 17 14. Bibliography 18 Part 1: Minimum Wage law in Hong Kong Introduction The Hong Kong Government introduced of a Minimum Wage in Hong Kong in May 2011, in response to increased incomes disparity in the territory. It uses economic theory to predict certain impacts such as level of employment, profits of firms, inflation effect and potential positive effects on the economy in general. Minimum Wage – Economic Theory Economic theory tells us that when artificial price floors are introduced in the market, they force prices to remain above the level that balances supply and demand. The same is true with minimum wage; it raises the quantity of labor supplied and reduces the quantity of labor...

Words: 3925 - Pages: 16

Premium Essay

The Disney Hong Kong Casse

...Case Study: HONG KONG DISNEYLAND George Koduah UMUC Case Study: HONG KONG DISNEYLAND George Kofi Koduah, UMUC AMBA 660, May 2013 The Hong Kong Disneyland case study is an example of the global necessity for profitability and brand recognition across international boundaries. The case sheds light on the important roles of culture, legal, economic and practical management strategic decision-making in the success of Multi National Companies. Disney’s strategic mode of entry into the Hong Kong market and the marketing mix and strategies employed for operations are analyzed against the cultural, economic and competitive conditions prevailing on the Hong Kong leisure landscape. Alternative strategies have been suggested taking into consideration the nature of the brand, competition and the society in which it has to operating. Analysis The two major issues and management problems Strategy/mode of entry: Disney’s major challenges for entering the Hong Kong market centers on its strategic mode of entry into the Hong Kong leisure market and failure to device appropriate marketing systems that will make it acceptable and profitable. According to Daniels, Radebaugh, & Sullivan (2013) strategy is “management’s idea on how to best attract customers, operate efficiently, compete effectively, and create value that builds and sustains a company’s position within its industry (p. 809). Globalization and the need to broaden product and market coverage for increased profit......

Words: 2505 - Pages: 11

Premium Essay

Hong Kong

...Global Business Cultural Analysis: Hong Kong Ruben R. Castro Dr. Maria Marin Business 604 July 3, 2013 History Hong Kong has been inhabited for millennia, with the early Che people settling the land early on. During the period of the Warring States in Mainland China, Yuet people immigrated from the north and forcibly assimilated the Che people. During the time of the Qin Dynasty Hong Kong was made a part of unified Imperial China. Throughout the Han Dynasty in the 10th century the region grew in economic importance as a result of the local pearl industry. When the Mongols invaded China, Hong Kong saw a large influx of refugees from Mainland China, creating a population boom and further enlarging the already strong economy that had built around Hong Kong as a maritime trading port. In the 19th century, Britain, faced with a growing trade deficit with China due to the British appetite for tea, expanded its sale of opium to China dramatically. The ruling Qing Dynasty disapproved, and banned the sale of opium. Britain pushed the issue by declaring war, and occupied Hong Kong Island by 1831. The British would control Hong Kong until World War II. The Japanese seized the region briefly during World War II. Shortly after the war, the declaration of Communist China led to a new wave of refugees to British Hong Kong. As China continued to pursue an isolationist stance during the Communist era, Hong Kong became an important connection between the West and the mainland, and...

Words: 5922 - Pages: 24

Premium Essay

Hong Kong

... Hong Kong as an Academic Destination Introduction Hong Kong attracts visitors from around the world for its universities,economic infrastructure, stunning nature,urban culture and the rhythm of the megapolis where ‘’East meets West.’’ Demographics During the 1990s, the population of Hong Kong grew rapidly. Nearly 7 million residents are related to Cantonese ethnic groups,called ‘’Hakka’’and‘’Chiu Chow’’. The society of Hong Kong suffers from an aging population due to the declining birth rate. Particularly, the fertility rate dropped to 1.09 in 2012, indicates the ratio below the replacement rate of 2.1.Simultaneously, life expectancy remains elevated ,and is planned to attain 82 for men and 88 for women by 2031. Hong Kong’s old age dependency rate is expected to enlarge and to exceed Japan by 2060. Language According to the 1996 census, the official languages ​​are Chinese and English, about 3.1% of Hong Kong citizens claimed English as the language of everyday communication and nearly 34.9% identified English as a second language.(Bolton,2000) Despite the ended British governance in 1997, Western culture is deeply entrenched in the country and harmonious with the conventional traditions and Eastern philosophy.(Buckley,1997). Education As a former of British overseas,territory of Hong Kong has retained the UK and US education systems.The University of Hong Kong was established in 1911 and has traditionally......

Words: 636 - Pages: 3

Premium Essay

Liquidity and Asset Pricing: Evidence from the Hong Kong Stock Market

...Finance 35 (2011) 2217–2230 Journal of Banking & Finance journal homepage: www.elsevier.com/locate/jbf Liquidity and asset pricing: Evidence from the Hong Kong stock market Keith S.K. Lam ⇑, Lewis H.K. Tam Department of Finance and Business Economics, Faculty of Business Administration, University of Macau, Av. Padre Tomas Pereira, S.J. Taipa, Macao, China a r t i c l e i n f o a b s t r a c t This study investigates the role of liquidity in pricing stock returns in the Hong Kong stock market. Our results show that liquidity is an important factor for pricing returns in Hong Kong after taking well-documented asset pricing factors into consideration. The results are robust to adding portfolio residuals and higher moment factor in the factor models. The results are also robust to seasonality, and conditional-market tests. We also compare alternative factor models and find that the liquidity four-factor model (market excess return, size, book-to-market ratio, and liquidity) is the best model to explain stock returns in the Hong Kong stock market, while the momentum factor is not found to be priced. Ó 2011 Elsevier B.V. All rights reserved. Article history: Received 10 June 2010 Accepted 17 January 2011 Available online 22 January 2011 JEL classification: G12 G15 Keywords: Liquidity Asset pricing Hong Kong stock market Factor model Fama French three factors Higher moment Momentum 1. Introduction Investors face liquidity risk when they transfer ownership of......

Words: 6217 - Pages: 25

Premium Essay

Hong Kong Economic Development

...introduction Hong Kong is one of the fastest growing economies in the world. It is also one the four Asian Tigers. Aim of this paper is to find out how Hong Kong’s “positive non-intervention” policy and rules-based approach applied in the practice and how it helps Hong Kong achieve enormously success. The factors account for the success of Hong Kong economy are that openness and freedom from foreign exchange rate and fiscal policy, reasonable economic policies, and non-interventional approaches to economic policymaking, and high trade volume. Even though government plays a minor role during the structural transformation and economic growth, it does not mean that government’s role is not important. In fact, government’s approaches help Hong Kong succeed in many ways. The first part of the essay will review brief background when Hong Kong was under British governance in 1950s and 1990s. Second part of this paper will investigate the rise of manufacturing in Hong Kong and during 1950s and 1960s. Third part of this paper will focus on the change in type of manufacturing during 1970s. Fourth part of this paper will examine the rise of financial sector in Hong Kong during 1980s to 1990s. In each of the periods, government’s impact on the economy will also be discussed. Hong Kong’s economy miracle between 1950s and 1990s is an excellent economic model to learn from for the rest of the world. Hong Kong government’s hands-off approach would also give guidance of economic......

Words: 3079 - Pages: 13

Premium Essay

Filipino Amahs in Hong Kong

...adapt to the Hong Kong style of family management 21st November, 2013 In this essay we discuss the cross-cultural differences in the household management of handling children between the Philippines and Hong Kong. Managing children in HK households In Hong Kong, Filipino maids make up 3% of the population. They are especially common amongst families who prefer an English speaking maid. Hong Kong people utilize maids for household management and supervision of the children while both parents have full time jobs. In many situations, the maids will spend far more time with the children than both the parents. Thus, the management of children in Hong Kong is highly related to the amah in the family. There are certain requirements of maids before employment in Hong Kong: * 2/3 Weeks training of Chinese household management * Experience in managing children As most of employers are busy at work, the maid becomes a critical part in the family in taking care of the children during daytime. From school activities to playground, the maid has full responsibility to take care of the children. Management of Children in Philippines: Most of the population in Phillipines do not have maids. In the case where the mother is a maid in Hong Kong, then the grandparents or the father need to shoulder the responsibility of taking care of the children. Differences: In this part we analyze how the maid manages the children of her employer in Hong Kong, and......

Words: 829 - Pages: 4

Premium Essay

Hong Kong Currency

...The legal tender in Hong Kong is the Hong Kong dollar (HKD), Source: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikNNjn9t The legal tender in Hong Kong is the Hong Kong dollar (HKD), Source: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikNNjn9t The legal tender in Hong Kong is the Hong Kong dollar (HKD), Source: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikNNjn9t which is pegged to the US dollar at a rate of about 7.80 HKD to 1 USDSource: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikOBDEGm which is pegged to the US dollar at a rate of about 7.80 HKD to 1 USDSource: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikOSqV4B which is pegged to the US dollar at a rate of about 7.80 HKD to 1 USDSource: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikOSqV4B which is pegged to the US dollar at a rate of about 7.80 HKD to 1 USDSource: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikOSqV4B which is pegged to the US dollar at a rate of about 7.80 HKD to 1 USDSource: http://www.discoverhongkong.com/eng/plan-your-trip/practicalities/other-information/money.jsp#ixzz2ikOSqV4B which is pegged to the US dollar at......

Words: 1621 - Pages: 7

Premium Essay

Hong Kong Disneyland Loan

...to build the new Disneyland in Hong Kong a new non-recourse entity, Hong Kong International Theme Parks Ltd (HKITP) was formed. While the owners supported the project with substantial amounts of equity (Disney and Government) as well as with subordinated debt (Government), Disney had significant requirements for the financing portion of the remaining needed amount. Disney was looking to receive bank financing for this new entity of HKD 2.3bn as a Delay Draw Term Loan (“DDTL”) plus HKD 1.0bn working capital line (“Revolving Credit Facility” or “RCL”). While they had learned from their most recent experience with Disneyland in Paris not to have a too aggressive capital structure in place, they nevertheless demanded significant flexibility with regard to the following terms and conditions: - 15 year tenor - delayed amortization structure which would start as late as 3 years after the opening of the park, i.e. 8 years after closing of the loan and 6 years after funding of the loan - allowed CAPEX for further expansion (instead of using FCF for amortization) - full underwriting of the deal by up to 3 Lead Arrangers - no subordination of management and royalties - main collateral for the deal (land) would only become gradually available as the government first needed to reclaim the land Not only did Disney remain conservative with regard to the overall capital structure (see Exhibit 5 in case) but they also chose to access the markets in 2000 in order to ensure......

Words: 1708 - Pages: 7

Premium Essay

Nestle Hong Kong

...1980s, or 1990s, Nestle joint venture with the dairy business to Hong Kong market. Hong Kong Nestlé has always attached importance an improvement and innovation, brands and products more living center. Advantages of brand building consumer trust, management as people orientation, Research & development of consumers delicious, nutrition, health and enjoyment, it has always been our goal to create value for society. It has expanded and reinvented itself become one of Asia’s most dynamic and reputable companies in Hong Kong. Uniqueness of the Hong Kong Culture As the undoubtedly unique culture in the world, the Hong Kong culture is an amalgamation of traditional Chinese value - Taoism, Buddhism and Confucianism, as well as the contemporary culture cultivated by the British colonial history and the capitalist economy. Core HK Cultural Dimension – Hierarchical Like other Chinese Societies, Hong Kong has been strongly influenced by traditional Confucian values that emphasize family socialization (Redding and Wong 1986) as mostly of last generation of Hong Kong were immigrants from China Mainland during 60s & 70s. Chinese accents that one’s conduct should always be within the norms of propriety (Li) and conformity to a rigid hierarchy of social relations (Wu-Lun). According to Hofstede’s theory of cultural dimension, Power distance is the extent that people expect and accept power is distributed unequally. Hong Kong Chinese is characterized by a high level of power......

Words: 3588 - Pages: 15

Premium Essay

Economic Growth in Hong Kong

...last forty to fifty years Hong Kong and Singapore have gone from developing nations to industrialized nations with high standards of living. Hong Kong and Singapore have gone from an average gross domestic product per capita of $5,000 forty years ago to $50,000 per capita today. Several fiscal and monetary policies have contributed to the economic prosperity of these two countries. Strategies that have been used to encourage economic growth in Hong Kong and Singapore include economic policies that foster investment, entrepreneurship, risk taking, and innovation. These fiscal and monetary policies have allowed Singapore and Hong Kong to experience significant and rapid growth. Singapore and Hong Kong have implemented fiscal and monetary policies that encourage investment, entrepreneurship, risk taking, and innovation. Some of the policies implemented in the last forty years include open economic trade policies that favor exports and imports by limiting tariffs. Another economic strategy is that both Singapore and Hong Kong established themselves as trade hubs for their regions, as well as financial hubs for their regions. Because Hong Kong and Singapore are financial hubs they both have stock markets and strong banking sectors, which allows for capital investment to be readily available. Singapore and Hong Kong both have implemented very low tax rates for both personal tax rates and corporate tax rates. Low tax rates, combined with Singapore and Hong Kong having very......

Words: 670 - Pages: 3

Premium Essay

Analysis of Hong Kong Prime Retail Property Market

...ANALYSIS OF HONG KONG PRIME RETAIL PROPERTY MARKET In analyzing Hong Kong’s retail property market, in particular the prime shopping mall segment, Michael Porter’s Five Forces Analysis Model is used. According to Porter, corporations in any industry are constrained from maximizing profit not just by rivalry with their competitors but by four further competitive forces. These five forces shape competitive intensity. They are: • Rivalry among competitors in the industry; • Threat of new entrants; • Bargaining power of suppliers; • Bargaining power of buyers; and • Threat of substitute products. Below is the analysis: • Rivalry among Established Competitors: Medium Pressure o Currently, major shopping malls in Hong Kong are primarily managed and owned by a handful of Chinese landlords, including Sun Hung Kai Properties, Henderson Land, Wharf Holdings, Hysan Development, Sino Land, Hang Lung Properties, as well as a few British-backed landlords such as Hongkong Land and Swire Properties. o Retailer demand is focused on prime locations in urban areas rather than secondary streets. These most sought-after locations are top choices for both global and local retailers seeking a presence in the city. Fierce retailer competition for the best locations means that landlords of prime shopping malls are allowed for jockeying for a better market position by select picking their right tenants and by upgrading their tenant and trade mix profiles. o With a common focus on......

Words: 733 - Pages: 3

Free Essay

Hong Kong Disney Land

...Global Banking and Capital Markets Hong Kong Disneyland HK$3.3 bn project loan Prof. Ingo Walter 1 Hong Kong Disneyland Borrower Project Cost Infrastructure Start Construction Start Opening HKTP Structure Hong Kong International Theme Parks Limited (HKTP) - owner & operator HK$14 Billion End-2000 End-2002 2005 - HK government 57% plus conversion rights into common for infrastructure development (up to 75% ownership if exercised) - HK$ 3.25 billion - Disney 43% - HK$2.45 billion - HK government sub-debt with repayment starting in Year 16 - HK$6.1 billion - Bank Loan - HK$2.3 billion 15-year non-recourse loan plus HK$1 billion non-recourse revolving working capital loan post-construction – HK$3.3 billion. 2 Mandate - Seeking Disney acting on behalf of HKTP, asks 17 banks to bid and it could mandate upto 3 banks to lead the deal Chase options: No bid Bid to win Bid to lose 3 Chase Options No bid 1. Joint mandate (fee split) 2. Aggressive competition (especially from Bank of China and HSBC) 3. Bad track record (Eurodisney) 4. Credit Issues: 15-year maturity No collateral other than site yet to be built Non-subordination of management fees Desire to use cash flows to grow the project Market risk Force majeure risk 5. Need for fully underwritten deal 4 Chase Options Bid to win 1. Disney important client 2. Marquee deal for the region 3. Chase not a top-10 player in Asian project loans Exh.6a......

Words: 4055 - Pages: 17

Free Essay

Filipino Helpers in Hong Kong

...Filipinos helpers in Hong Kong are at the risk of being maltreated Introduction Castillo Clariza Avenales who was in her age of 33, had her right thumb being chopped by her male employer after she reported his sexual misconduct to his wife last year. She was not the first one experienced such an unfortunate incident. Hong Kong, which comes to the top rank in world domestic labor employment, has long been seen as somewhere nearby to earn good salaries for better livings by the Filipinos. However, these people might place themselves under the danger of being abused in this workplace. In a 2001 survey conducted by the Hong Kong Human Rights Monitor which is a shadow committee of the United Nations, 1000 maids out of 2500 claimed they were physically abused while 175 of them said they were either harassed or raped. (Stafford, 2001, p. 5) This number was underestimated, according to the Hong Kong Overseas Maid-Employer Association dean, since it was not precise and scientific enough as the police figures which the authorities never revealed. It is actually not uncommon to see Filipinos getting involved in discrimination, unfair treatments, and even violence. Discrimination, unfair treatments, abuses and violence Gatmaytan (1997) stated that “Filipinas are imported by other countries for jobs their own citizens will not perform and for wages domestic citizens would not accept,” (p. 247) which is very true. In Hong Kong, Filipinos are receiving salaries that two times or...

Words: 1483 - Pages: 6