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tax evaders

wahahahahaha.....hahahaha.....very witty .... even when this was a 5cents category question....

Bankruptcies underline Hong Kong's exposure to credit crisis
By Susan Fenton ReutersPublished: October 21, 2008

HONG KONG: A spate of corporate bankruptcies in Hong Kong has highlighted the territory's vulnerability to the credit crisis and the slowing global economy, clouding the outlook for its banking sector.

In the past two months, provisional liquidators have been appointed for six Hong Kong companies, including the jewelry maker 3D-Gold Jewellery Holdings, formerly Hang Fung Gold, as well as the retailer U-Right and the toymaker Smart Union, a supplier to Mattel and Disney.

With more businesses expected to succumb to the pressures of rising costs, weakening demand and difficulty in obtaining financing amid the credit crisis, analysts said the number of bankruptcies would surge and were cutting their earnings forecasts for Hong Kong banks.

"We believe this is only the beginning of the credit deterioration cycle for Hong Kong banks," Citigroup said in a research note Monday. "Retailers and exporters are likely to feel the most pain, given declining property prices, shrinking consumer spending, falling export demand and tightening bank credit."

The Hong Kong General Chamber of Commerce said Monday that it believed the territory was heading for a recession. It projects zero to 1 percent growth in 2009 as the economy feels the effect of a U.S. recession, slower trade and easing growth in mainland China.

"This is the worst economic environment of our lives," said David O'Rear, the chamber's chief economist.

"It isn't a slump, a contraction, a downturn or a correction," he added. "Companies need to look to their cash flow in anticipation of a very rough ride in 2009."

In the banking sector, Citigroup considers Bank of East Asia the most sensitive to rising credit costs, citing its relatively low profitability.

"We estimate that every 50 basis point increase in credit cost would lower BEA's fiscal 2009 earnings by 30 percent, compared to 14 percent for Bank of China and 9 percent for Hang Seng Bank," the note said.

Morgan Stanley on Monday cut its earnings estimates for Bank of East Asia and said its share price, which has already plunged 60 percent this year, could slump to 15 Hong Kong dollars, or $1.93, from 20.80 dollars at the close Monday.

Hang Seng Bank, a unit of the global lender HSBC, is Morgan Stanley's top banking stock for 2009 on the expectation that its earnings should outperform the sector because of prudent lending practices, and because it did not sell the "mini-bonds" offered by the collapsed U.S. investment bank Lehman Brothers. Thousands of Hong Kong investors in those securities lost money, and banks that sold them have agreed to compensate purchasers.

Morgan Stanley also cut its earnings estimates for the smaller banks Wing Hang Bank and Dah Sing Financial, saying aggressive growth in their loan books in the past two to three years would result in sharply higher credit costs.

Adding to the banks' deteriorating outlook is the potential for a sharp rise in bankruptcies in southern China as well as in Hong Kong. Clement Chen, chairman of the Federation of Hong Kong Industries, said that in a worst-case outlook, a quarter of the roughly 70,000 factories owned by Hong Kong companies in the Pearl River Delta linking Hong Kong and southern China could close down.

"The outlook at the moment is rather grave," Chen said.

Things could get "most difficult" in the next few months leading up to the Chinese New Year, he added, when companies give their annual bonuses to workers before the long seasonal holidays.

October 23, 2008, 6.39 pm (Singapore time)

HK central bank intervenes to protect currency peg

HONG KONG - The Hong Kong Monetary Authority on Thursday intervened in the foreign exchange market, buying HK$3.88 billion (US$500 million) worth of US dollars to maintain the local currency's peg to the greenback.

A spokesman for the HKMA, the city's de facto central bank, said there had been increased demand for Hong Kong dollars in recent days.

'Taking into account market conditions, the HKMA operated within the convertibility zone, purchasing US dollars against Hong Kong dollars,' he said in a statement.

The statement said the aggregate balance was projected to increase by HK$3.88 billion to US$17.96 billion as a result of the action.

Under Hong Kong's currency system, the HKMA is committed to defending the peg of HK$7.80 to the US dollar, but it allows the local currency to move within the HK$7.75-7.85 range.

At 4pm (0800 GMT), the Hong Kong dollar depreciated slightly to 7.7533 to the US dollar, from a high of 7.7521 at 2pm (0600 GMT). The intervention was announced at around 0630 GMT.

Traders said Hong Kong's decision to guarantee all bank deposits until 2010 may have contributed to the move.

'I won't be surprised if there are more interventions to come,' said an unnamed trader at a local bank, according to Dow Jones Newswires.

He said he saw a large amount of fund inflows as investors sought to take advantage of Hong Kong's full deposit guarantee scheme.

'Many investors are trying to park their funds in Hong Kong, which is a more stable market amid the volatile global financial situation,' the trader said.
The Hong Kong authorities have always insisted since that there would be no change to the peg and over the years have resisted all attempts by speculators to force their hand.

Chief Executive Donald Tsang reiterated his commitment to the peg last week, despite worries that the greenback could lose some of its value.

During the 1997-1998 Asian financial crisis several currencies around Asia were de-pegged under severe pressure from speculators, but Hong Kong maintained the link despite having to raise interest rates to spectacular levels.

The latest injection comes after the HKMA bought HK$4 billion worth of US dollars on Monday to boost interbank liquidity. -- AFP

how come HK dollar is getting stronger inspite of a poor economic front ? confusing....

Oct 27, 2008
HK central bank intervenes

HONG KONG - THE Hong Kong Monetary Authority on Monday intervened in the foreign exchange market for the third time in eight days, buying HK$7.75 billion worth (S$1.503 billion) of US dollars.
The city's de facto central bank said it bought US dollars to maintain the local currency's peg to the greenback amid the global financial crisis.

'There is a very strong demand for Hong Kong dollars,' a spokesman told AFP.

'Taking into account the strong precautionary demand for liquidity in the market, the HKMA operates within the convertibility zone, purchasing US dollars against HK dollars,' she said.

The aggregate balance is projected to increase by HK$7.75 billion dollars to HK$23.71 billion on October 29 following the injection, the spokesman said.

But the spokesman maintained that the exchange rate of Hong Kong dollars remains stable.

The authority bought HK$3.88 billion dollars worth of US dollars last Thursday to ensure there was sufficient liquidity in the interbank market. It also bought HK$4.0 billion worth of US dollars last Monday.

Under Hong Kong's currency system, the HKMA is committed to defending the peg of HK$7.80 to the US dollar, but it allows the local currency to move within the HK$7.75-7.85 range.

During the 1997-1998 Asian financial crisis several currencies around Asia were de-pegged under severe pressure from speculators, but Hong Kong maintained the link despite having to raise interest rates to spectacular levels. -- AFP

kennynah wrote:how come HK dollar is getting stronger inspite of a poor economic front ? confusing....

millionairemind wrote:Oct 27, 2008
HK central bank intervenes

HONG KONG - THE Hong Kong Monetary Authority on Monday intervened in the foreign exchange market for the third time in eight days, buying HK$7.75 billion worth (S$1.503 billion) of US dollars.
The city's de facto central bank said it bought US dollars to maintain the local currency's peg to the greenback amid the global financial crisis.

still doesnt explain how the HKD can be so strong....that the need to BUY USD (means sell HKD) so that HKD can "weaken"....but why the sky rocketing HKD ??? got inflation big time meh ?

Maybe HKD is strong becuz the money is flowing back into HKD from Mutual Fund redemptions, AUD, Eur and the CNY.

A lot of HK people has been investing in foreign currencies and various Mutual Funds.

Hong Kong Merchandise Exports, Imports Growth Climbs in September
10/27/2008 9:58 AM ET

(RTTNews) - Monday, the Hong Kong Census and Statistics Department announced that exports value of goods increased 3.6% year-over-year to HK$247.2 billion in September, larger than the 1.9% rise recorded in August. Economists had expected an increase of 1.5%.

Meanwhile, the imports value climbed 3.9% annually in September, totaling HK$263.2 billion. In August, imports value had grown 1.5%. Economists were looking for an increase of 1.1%.

At the same time, the visible trade deficit stood at HK$16 billion, widening from the HK$12.9 billion seen in the prior month.

In the third quarter, exports value decreased 1.3% on an annual basis. Similarly, imports value dropped 1.1%.

During the January to September period, exports value and imports value rose by 7.8% and 9.1%, respectively.

Hong Kong's Residential New Loan Approvals Increase
10/27/2008 10:12 AM ET

(RTTNews) - Hong Kong's new loans approved rose 7.8% month-on-month to HK$14.5 billion in September, results of the residential mortgage survey conducted by the Hong Kong Monetary Authority showed Monday.

According to the official report, the growth was mainly due to increases of HK$0.9 billion in approvals for primary market transactions and of HK$0.2 billion in approvals for refinancing loans.

Meanwhile, the approval for secondary market transactions remained little changed at HK$9.9 billion and the number of new applications increased 18.5%.

The proportion of new loans approved at more than 2.5% below the best lending rate increased to 83.1% from 82.8% in August. The outstanding value of mortgage loans increased 0.2% to HK$596.7 billion.

On a monthly basis, new mortgage loans drawn down declined 4.6% to HK$11.6 billion.