Sunday, 4th December, 2005

Dear Reader,

Wow! What a day. We and 250,000 fellow citizens marched for democracy. By our judgment, having been on all these marches, the turnout was second only to the 1-Jul-03 Article-23 march. Even Anson Chan got off the fence and voted with her feet. If the Government doesn't make substantial concessions, the pro-democracy camp will be justified in voting down the reform package. It is not a matter of "perfecting" it - the proposals are far short of acceptable.

The electorate of the Functional Constituencies must be broadened without further delay, study, consultation or strategic commission. Why is it, for example, that every accountant, lawyer, doctor and teacher gets to vote in their FC, but every financial services professional registered with the SFC or banker registered with the HKMA does not, and their respective sectors are represented by a convicted criminal (financial services) and a bank CEO who has only faced one contested election in 20 years (banking)? Surely if the thousands of professionals working in banks, brokerages and fund managers can be trusted with other people's money, then they can be trusted to elect their legislator.

If the reform package is vetoed, then that is not the end of it - the veto would simply increase the pressure on the Government to table something more credible, and soon.

Now for something more cheerful...

The 2005 Christmas Pick (4-Dec-05)
Season's greetings to all our readers - time for our annual stock pick, when Santa rummages in our sack of small-cap investments for the stock we think is most likely to perform over the next year. Last year, our pick gained 30.8%, much better than the 10.9% on the HSI. Over 6 years of picks, we've gained 474% and beaten the HSI by 392%. So what are we putting under the Christmas tree this year? Read on...

20% of 70 is not 12 (30-Nov-05)
A little-noticed provision of the Government's constitutional proposals seeks to contravene the Basic Law by restricting the percentage of legislators who can hold right of foreign abode to less than that provided by the Basic Law. If the proposal proceeds into local law, then we will consider bringing a judicial review. Ironically, when it suits them, the Government proposes a percentage nomination criterion for the Chief Executive rather than the absolute number in the Basic Law.

Corporate Voting in HK Elections (28-Nov-05)
In our first article leading up to the march for universal suffrage on Sunday, we look at the failure of HK's Government to abolish the small-circle corporate voting system which secures business dominance of the Functional Constituencies and a veto in LegCo. We illustrate it with an investigation of the Transport constituency electorate.


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David M Webb