Special Report | Citigroup's CEO Jane Fraser speaks on the lasting appeal and pivotal role of Hong Kong

Despite the possibility of a trade war, it will not affect the US bank's growth strategy in Asia, or diminish the significance of Hong Kong, Fraser shares in an exclusive discussion.

Jane Fraser, the worldwide CEO of Citigroup, holds a deep affection for Hong Kong. Although her individual association with the city doesn't span as long as the company's – a 122-year history – it does encompass several decades.

Fraser was one of the 300 international financial experts who assembled in the city for a three-day conference, which ran from November 18 to 20, to exchange ideas and talk about shifts in the industry.

It goes without saying that the possibility of imposing substantial tariffs on Chinese products if Donald Trump resumes presidency was a hot topic of discussion. Although these possible tariffs could change the course of global commerce as businesses shift their production away from mainland China, Fraser doesn't envision this impacting Citigroup's strategy in Asia.

"Our growth in the area won't be impacted," she stated. "Citi enjoys the advantage of having a global reach and footprint in numerous locations, and a history of over 120 years in Hong Kong. Additionally, we have a long-standing presence in mainland China, India, Japan, Singapore, among various other markets."

Towngas division is prepared to construct an eco-friendly jet fuel facility close to Hong Kong, given the appropriate policies are established. The Hong Kong administration is anticipated to declare a goal for sustainable aviation fuel within the next four years.

EcoCeres' facility, located in Zhangjiagang within China's Jiangsu province, has the capability to transform used cooking oil into biofuel at a volume of 350,000 tonnes annually. According to Executive Chairman Matti Lievonen in a recent interview, the plant began operations in 2021 and is currently running at maximum capacity.

The production from this source, which has a carbon emission that is up to 90% lower than traditional jet fuel, is shipped to Europe. Its popularity is likely to increase due to growing governmental requirements for airlines to use at least 2% biofuel starting next year. This requirement is set to increase to 6% by 2030 in the European Union and to 10% in the United Kingdom.

"Since SAF is a novel product that costs more to manufacture, it's crucial for governments to establish definite, long-range strategies that will encourage businesses to invest," stated Lievonen, the past chief executive of Neste, a Finnish company recognized as the world's leading producer of renewable fuel from waste.

Increasing the availability of resources online is crucial for reaching goals as the demand rises and supply falls behind. Consequently, SAF costs thrice as much as the regular jet fuel. Furthermore, establishing a supply source within the Greater Bay Area could cut down on transport expenses.

Rental returns in Hong Kong have reached a pinnacle not seen in over a dozen years due to an increase in skilled workers and reduced costs. Experts predict the trend will continue to rise in 2025 with more industry experts flocking to the city and individuals delaying buying homes.

Analysts report that the income from renting residential properties in Hong Kong has reached its peak in over twelve years. This trend is expected to continue for the next couple of years, fueled by strong interest from new residents and a decrease in home loan expenses.

The city's average rental return slightly increased by 0.04 percentage points, reaching 3.47 percent at the end of September, which is the highest it's been in roughly 12.5 years according to the Centa City Rental Index Yield from Centaline Property Agency. Over the five months leading up to September, this measure rose by 0.38 percentage points.

Out of the 138 properties monitored by Centaline, 22 of them had a rental yield surpassing 4% in September, which is an increase of four properties from August. The rental yield for Tak Bo Garden in Kowloon Bay reached 5.16%, marking the first instance a property exceeded 5% since January 2012, according to data from Centaline.

"Rental returns have nearly reached their highest point this year and could experience a minor drop due to seasonal factors," stated Yeung Ming-yee, a high-ranking associate director at Centaline. "They are expected to stabilize at 3.4 per cent by the year's end."

The pace of leasing activity could pick up following the Lunar New Year in 2025, a period generally associated with increased activity, and it's expected to continue its upward trend over the subsequent two to three years, although at a reduced rate, she mentioned. The primary factors fueling this demand will be individuals delaying home purchases due to fears of declining prices, and newcomers brought in through the city's talent program, she further noted.

Units of 430 square feet or smaller saw a return of 3.7% in September, an increase of 0.6 percentage points compared to the same time in 2023. This marks the highest yield in over a decade, as per the data provided by the Hong Kong Rating and Valuation Department and reported by Ricacorp Properties.

The report also noted an increase in yield for apartments ranging from 431 to 752 square feet, with a slight increase of 0.1 percent, bringing it up to 3.2 percent in September.

The progress of Bitcoin towards the unprecedented $100,000 mark pauses as cryptocurrency investors display prudence. An analyst noted that Bitcoin has been significantly over-purchased since the electoral period.

The value of the digital asset plummeted to as little as US$95,776 on Sunday, having nearly reached the significant milestone of six figures just two days earlier on Friday. The asset had difficulty maintaining a value around US$97,000 early Monday in Asia, casting a negative outlook on the broader cryptocurrency market.

"Concerns are rising among investors that there might be a pause now that it has essentially reached the US$100,000 mark," stated Matt Maley, head market analyst at Miller Tabak + Co. "It's worth mentioning that the optimism related to bitcoin is becoming intense."

The anticipated administration of Trump is seen as a positive influence for cryptocurrency throughout Wall Street and further afield. The total worth of the digital-asset market has witnessed a rise of approximately US$1 trillion following the Republican's triumph on November 5.

Trump has committed to more amicable regulations and has vowed to establish a national reserve of bitcoins, though the schedule for execution and the practicality of the bitcoin stash are still matters of uncertainty.

Hong Kong's stock market is nearing a two-month low, with New World seeing a decline following its removal from the Hang Seng. The city's stock market turnover has decreased by roughly 5% compared to the average of the past 30 days.

The Hang Seng Index experienced a 0.4 per cent fall, closing at 19,150.99, thus continuing the 1 per cent slide it saw last week. This marks its lowest point since September 25. Meanwhile, the Hang Seng Tech Index also decreased by 0.3 per cent.

The city's stock market experienced approximately a 5 per cent decrease in turnover compared to the 30-day average, as per the data from Bloomberg.

Indices on the mainland also saw a slight decline: the CSI 300 Index dropped by 0.5 per cent while the Shanghai Composite Index decreased by 0.1 per cent.

The recent surge in the Hong Kong market has lost momentum following China's less than satisfactory fiscal stimulus, which has left investors feeling disillusioned, in addition to concerns over increased tariffs from the US. Analysis of recent profit reports indicates that public companies continue to struggle with low domestic demand in China, alongside ongoing real estate issues. As of last Friday, the Hang Seng Index has decreased by 17% from its peak this year, which was in October.

The surge in bitcoin has benefited Boyaa, a Chinese game developer, leading to a ninefold increase in their shares in Hong Kong. This company, known for creating online card and board games, began their investment in digital currencies back in 2023.

Boyaa, headquartered in Shenzhen, has augmented its Bitcoin investments in the past year. By November 21, the company possessed 2,688 Bitcoin units, which resulted in an estimated profit of around $120 million, as stated in their most recent financial statement.

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Bitcoin's progression towards an unprecedented US$100,000 mark halts due to caution among crypto investors.

On Monday, Bitcoin experienced a 1.4% increase, reaching a value of US$98,426.57. This value is near its all-time high of US$99,420.01, achieved on Friday. The virtual currency has seen a staggering 135% increase in value this year, stopping just short of the US$100,000 milestone.

Huawei is targeting 100,000 applications for its indigenous HarmonyOS Next, in preparation for the launch of Mate 70. Up until October 22, during its public beta phase, HarmonyOS Next had more than 15,000 original apps and services.

"Reaching 100,000 applications showcases the development and readiness of the HarmonyOS ecosystem to cater to customer demands," stated Eric Xu Zhijun, the rotating chairman of Huawei, at a conference on Saturday. "This will be a critical goal for the ecosystem in the forthcoming six months to one year."

Xu stated that HarmonyOS Next already supports the most commonly used 5,000 apps, making the ecosystem fundamentally functional. However, he pointed out that there are still numerous infrequently used but crucial apps that need to be developed for the platform.

"We require additional programmers, collaborators, and community influencers to collectively advance HarmonyOS Next into the 'veins' of the app industry," Xu addressed the crowd.

The existing digital environment comprises 18 types of applications that cater to the everyday requirements of users. This includes popular social media platforms such as Tencent Holdings' WeChat and ByteDance's Douyin, and also a few public services like the forthcoming official tax app from China, as stated by Xu.

Paul Chan announces plans for Hong Kong to enhance financial changes to support Chinese businesses

In the face of global political conflicts, the city has the capacity to assist mainland companies that are finding it difficult to secure funding overseas, states the financial secretary.

Hong Kong intends to implement additional financial changes to assist mainland Chinese corporations struggling with investment and funding difficulties in Western markets, according to the city's finance chief on Monday. Simultaneously, a high-ranking central government representative in Hong Kong appealed for backing for "integrated development".

"Given these conditions, Hong Kong plans to introduce more changes to its securities and financial sectors to draw in additional national and international funding. This move supports the growth requirements of projects and enterprises in the Greater Bay Area."

Qi stated that the Greater Bay Area, which includes Guangdong, Hong Kong, and Macau, houses around 5,000 public companies. This area has been instrumental in contributing to the development of essential partnership platforms, enhancing the financial linkages between the two regions, and fostering financial and trade cooperation between them.

Chan and Qi addressed the audience at the 2024 Summit of Listed Companies in the Guangdong-Hong Kong-Macau Greater Bay Area, held in Hong Kong.

Qi expressed his hopes that companies registered in the Greater Bay Area will utilize the benefits offered by Hong Kong, especially as a launchpad for global growth. He encouraged these companies to not only strengthen their presence in European and American markets but also to collaborate in investigating potential opportunities in burgeoning markets such as Asean, the Middle East, and Latin America.

HSBC report identifies Singapore and Hong Kong as leading investment and business markets in Asia. Singapore is the preferred relocation spot for affluent business individuals, however, Hong Kong didn't make it to the top 10.

According to a report by HSBC, affluent investors planning to relocate or shift their investments within the next year are primarily choosing Singapore as their preferred destination in Asia, over Hong Kong.

Close to 70% of wealthy investors have expressed interest in transferring all or a portion of their assets to a different location within the next year, as per the Global Entrepreneurial Wealth Report published by a UK bank on Monday. Switzerland was the preferred choice, with Singapore coming in fourth place and Hong Kong in seventh.

Approximately 55 per cent are contemplating relocating themselves to a different place, with Singapore being their preferred choice. Hong Kong did not manage to rank within the top 10 preferred destinations.

Singapore has been ranked as the leading financial hub for wealthy business owners to invest their resources and carry out business operations in Asia for the upcoming year.

HSBC conducted a poll involving 1,882 enterprise proprietors from countries including the US, UK, France, Hong Kong, India, mainland China, Singapore, Switzerland, Taiwan, UAE, Japan, and Australia in the months of July and August. The participants in this survey are each in possession of a minimum of US$2 million in assets available for investment, with a third of them boasting a minimum of US$100 million.

"The study revealed that Hong Kong and Singapore continue to be the most attractive markets for affluent people in Asia," stated Wilson Chan Fung-cheung, the associate director of the MBA programme at City University in Hong Kong. "Hong Kong, being the access point to mainland China, still provides numerous business prospects and potential for growth."

Oppo, a Chinese smartphone manufacturer, is planning to increase production in Indonesia, targeting the Southeast Asia market. While Oppo already utilizes just over the 35% of local smartphone parts mandated by Indonesian regulations, the company aims to expand further.

Approximately 36 to 37% of the smartphone parts that Oppo procures for its Tangerang-based Indonesian plant are domestically sourced. These include batteries, packing materials, adaptors, and USB cables, as stated by Jefry Firman de Haan, the director of Oppo's Indonesia Manufacturing Centre.

The percentage of components marginally exceeds the 35 per cent minimum established by Indonesia for smartphone manufacturers under its domestic component level (TKDN) regulation. Fulfilling this requirement is necessary for companies to market their phones in the nation, which boasts the most robust economy in Southeast Asia.

Nonetheless, Oppo has ambitions to progress even more, as stated by de Haan. "We're in search of reliable providers for all our components, engaging in close discussions and collaborations with the Ministry of Industry as well as local authorities to identify the best suppliers and vendors for our needs," he expressed during a company-sponsored media tour of the factory on Tuesday.

Shanghai relies on renowned global artists to attract tourist expenditure. Organizers claim that a recent art festival that lasted a month brought in 20,000 foreign visitors, bolstering the authorities' belief in their approach.

Shanghai has warmly welcomed top-tier symphonies, vocalists, dancers, and actors, with the conviction that sophisticated performances can efficiently boost tourism and expenditure during a downturn in retail sales.

"She mentioned that an abundance of foreign visitors have journeyed to Shanghai in the recent weeks, drawn by the allure of high-quality performers. The promising statistics have strengthened our conviction to bring more international artists to the city moving forward."

The hub, a division within the Shanghai Culture and Tourism Administration, was in charge of the month-long arts festival, which concluded on Sunday.

Approximately 1,600 performances took place throughout the festival, attracting around 20,000 international visitors to Shanghai, which made up about 8% of the total crowd. The preliminary data from the event's coordinator showed that 24% of the festival-goers were from different regions of the mainland.

Around 60% of the performances were by international artists, and over 90% of these artists were making their debut in Shanghai.

The events of the festival, such as discussions, workshops, and displays, attracted over 10 million attendees, as reported.

Competing art dealers Christie's and Sotheby's unveil their extravagant new showrooms in Hong Kong. The luxurious upgrades to the auction houses demonstrate their intention to transform their business operations.

Sotheby's selected a two-level, 24,000 square foot area in the Landmark Chater structure owned by Hongkong Land in Central for its renewed centerpiece. It offers an array of engaging activities and exhibits comparable to those in museums. The main level will be the venue for exhibitions, performances, and auctions all year round, whereas the upper level will deliver a meticulously organized shopping experience for experienced purchasers.

Covering an area of 50,000 square feet from the sixth floor to the ninth, Christie's new location enables it to host a wide range of art auctions and events. It caters to international collectors and various others, providing galleries, auction rooms, client-specific areas, and office spaces.

The upgraded, stylish interiors of the auction houses mirror their ambition to modify their business operations, facilitating a greater number of events.

"In the past, art galleries and houses typically rented hotel spaces or exhibition centers for their auctions or displays," stated Poon Kin-pong, the senior director of project and development services at JLL in Hong Kong. "But now, they favor conducting these events in their own workspaces. This change enables them to organize auctions and exhibits more consistently and on a regular basis."

Poon stated that these companies prioritize the quality of a structure and its management services. He added that handling more business internally provides them with more adaptability in tailoring the appearance and atmosphere of their spaces.