Sunday 13th May 2018

Dear Reader,

Why HK has no retail bond market
The HK Government's Pilot Bond Grant Scheme is needless corporate welfare and deflects from the real problem: by protecting bank profits from competition for funding and effectively excluding retail investors, the Government and HKMA are preventing a liquid, exchange-traded bond market from emerging. We explain what they need to do instead. (13-May-2018)

Justice is blind, except for haircuts
The Court of Appeal rules that a prison order requiring men to have short hair and allowing women to choose is not discriminatory, because of societal norms for haircuts. We find substantial flaws in this reasoning. We also find that the UK rule which HK inherited was amended by 1999 to remove the discrimination, something that Long Hair's lawyers appear to have overlooked. (1-May-2018)

CMBC Capital (1141) grants HK$430m margin loan facility to another Macrolink company owned by Fu Kwan
Company announcement, 10-May-2018
That's on top of a US$30m loan to another of Mr Fu's companies 2 days earlier, and existing loans to that company of US$70m. The margin loan is at 8.5% p.a.. CMBC Capital's total exposure to Mr Fu's companies is now HK$1,210m, or about 96% of its net tangible assets. CMBC Capital in our view is a bubble stock, with a market value of HK$24.3bn, or about 19 times its net tangible assets.

Judge orders confiscation of HK$111m from ex-warrants trader
ICAC, 7-May-2018
If Raymond Ng Chun To doesn't pay up, his jail sentence will triple from 4.5 to 13.5 years.

Listing Committee censures Zhang Jing Zhi…and Jiang An Ping, both ex-Sound Global (0967)
SEHK, 3-May-2018
Once again, HKEX is unable to reach former directors of a listed company to co-operate with an investigation. HKEX's regulatory function should be transferred to the SFC, which co-operates with the CSRC.

Imagi (0585) lends HK$100m to an unnamed money-lender2nd announcement
Company announcement, 2-May-2018
The second announcement names it as HEC Finance 03 Limited. No surprise there - they are both in what we call the "Chung Nam Network". The borrower was incorporated in 2003 and was formerly known as "Sun Chung Nam Finance Limited"

PECS Register monthly update
HK Government, 30-Apr-2018

And much more besides...
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David M. Webb