The Exchange Fund of Hong Kong announces its fifth-highest yearly return, even with a loss in the final quarter. The fund reported a 3% drop in 2024, down to HK$219 billion (US$28 billion), primarily because of a HK$20.1 billion loss in the last quarter.

Hong Kong's financial defense mechanism, the Exchange Fund, revealed a loss for the last quarter due to decreasing bond values and a reduction in the worth of non-US dollar assets.

The fund recorded its fifth-highest annual yield for the entire year, demonstrating the success of a varied investment strategy. The return on investment in 2024 dropped by 3 per cent compared to the previous year, amounting to HK$219 billion (US$28 billion), according to the Hong Kong Monetary Authority (HKMA) statement released on Monday.

The Exchange Fund posted record-breaking results for the initial three quarters of 2024, however, a loss of HK$20.1 billion in the final quarter halted the streak of four straight profitable quarters. During the period from October to December, Hong Kong's stock market experienced a decrease of HK$6.7 billion, while the foreign exchange suffered a valuation loss of HK$27.4 billion. These losses were partially balanced by a rise of HK$11.3 billion in bonds and a HK$2.7 billion hike in foreign stocks.

The subpar showing of the stock markets in the final quarter, coupled with declining bond prices, impacted the Exchange Fund's performance, according to Eddie Yue Wai-man, the HKMA's Chief Executive Officer, during a press conference. He further noted that a robust US dollar also negatively influenced the fund's returns.

The total assets of the Exchange Fund saw a rise of HK$65.9 billion, reaching a value of HK$4.082 trillion by the end of the previous year.

BYD sets aside $5 billion for foreign exchange derivatives trading to mitigate risks from fluctuations in the yuan value. As the biggest electric vehicle producer globally, the company aims to safeguard its expanding international activities from the instability of the yuan, given the escalating trade conflicts.

"In an attempt to counterbalance the negative effects of volatile currency exchange rates and to reduce financial costs, the firm has opted to engage in foreign exchange hedging via derivatives trading," stated BYD in a document submitted to the Hong Kong stock market over the weekend. "The derivatives trading will proceed based on business requirements."

The automobile manufacturer based in Shenzhen, that includes Warren Buffett's Berkshire Hathaway among its shareholders, clarified that the 5 billion dollars would solely be allocated for hedging activities.

Currency futures serve as a protective mechanism enabling traders to limit possible damages from currency exchange. In practical terms, if the Chinese yuan gains strength, it could result in foreign exchange losses for the car manufacturer if its overseas revenue loses value.

BYD's decision to engage in forex derivatives trading stems from its swift international expansion, driven by the growing acceptance of its mass-market electric vehicles beyond China's borders. The firm has a presence in almost a hundred nations.

The primary shareholder of Vanke appoints a new chairman to help the struggling developer navigate its way out of debt. The newly appointed chairman's ties with the state have been positively received, however, the future of the company is still reliant on a resurgence in sales, according to an analyst.

Yu Liang stepped down from his position as chairman for reasons related to job modifications, however, he will stay on as a director within the company, according to a report filed with the Hong Kong stock exchange by Vanke on Monday. The newly appointed chairman, Xin Jie, also holds the position of chairman at Shenzhen Metro Group, which is the largest shareholder of the development company.

The Shenzhen State-owned Assets Supervision and Administration Commission (SSASAC), boasting a wealth of over 5 trillion yuan (around US$689 billion), possesses the capability and sufficient resources to back the Shenzhen Metro Group in fostering Vanke's steady growth via all potential avenues, says a representative from SSASAC. This information was reported on Monday by the government-run publication, Nanfang Daily.

The cost of Vanke's bonds due to mature in 2025 saw an increase of 11 per cent, and the price of bonds set to mature in 2029 grew by 9 per cent, as reported by Dealing Matrix, a company specializing in bond data.

In a different report, Vanke predicted a net deficit of 45 billion yuan in 2024, a significant drop from a net gain of 12 billion yuan in 2023. The company attributed this to declining sales and profit margins, allowances for credit and inventory devaluation, and losses in large-scale asset and equity trades.

Hong Kong's Securities and Futures Commission (SFC) has hit Hang Seng Bank with a penalty of US$8.5 million due to malpractice. The SFC unveiled that the bank had been involved in major unethical activities, such as charging exorbitant fees and encouraging customers to carry out numerous transactions.

The financial regulatory authority in Hong Kong has penalized Hang Seng Bank with a fine of HK$66.4 million (US$8.5 million) for not adhering to regulations and excessively billing customers.

Hang Seng Bank reportedly earned a surplus of around HK$22.4 million from these deals.

The behavior of Hang Seng in these instances was grave and widespread," announced Christopher Wilson, the director of enforcement at the SFC. "Specifically, customers who claimed to be making their own investment choices were continually encouraged by Hang Seng's relationship managers to participate in extensive and continuous CIS transactions."

The punitive measures were a result of an inquiry by the Hong Kong Monetary Authority (HKMA), which exposed a variety of issues related to Hang Seng's distribution of CIS products from June 2016 to November 2017, as per the SFC's announcement.

The SFC revealed that they discovered 111 client accounts that carried out 100 or more CIS transactions within the given timeframe. Although the majority of these transactions were classified as the client's "personal decision", around 46 clients were reportedly swayed by the advice or suggestions of their relationship managers when making trades, as per the announcement.

Leading Chinese memory chip manufacturer, YMTC, secures another design advancement, despite US trade restrictions. Research firms have discovered that Yangtze Memory Technologies Corporation is incorporating a fresh design into chips with 294 gates.

TechInsights reports that Yangtze Memory Technologies Corporation (YMTC), the top producer of flash memory chips in China, has successfully made a notable advancement in technology. This accomplishment comes in spite of US sanctions, and aligns with Beijing's efforts towards achieving technological independence.

TechInsights, a Canadian research firm specializing in integrated circuits, recently reported that YMTC has incorporated its latest Xtacking4.0 memory chip design into its most dense 3D NAND chip. This chip was found in the commercial ZhiTai TiPro9000 solid-state storage device.

The chip is designed with a two-tier structure, consisting of a bottom layer with 150 gates and a top layer with 144 gates, amounting to a total of 294 gates. It employs a method called hybrid-bonding to fuse two wafers together.

After the launch of Xtacking4.0 devices like YMTC's 160-layer product last year, industry analysts predicted that the company would integrate this structure into products with more layers.

The updated design outshines the complexity of its previous model, which consisted of 180 gates. Its most significant feature is the revamped internal structure, and a groundbreaking achievement is its storage density, offering an unprecedented capacity of more than 20 gigabits per square millimetre. TechInsights approximates that the design includes about 270 functioning memory layers.

"Key point to note here is that China's YMTC has outperformed its rivals by getting to the market first," TechInsights' senior analyst Jeongdong Choe, the author of the report, remarked. "YMTC seems to have discovered a solution to the existing prohibition with the launch of this new chip, thanks to the innovative Xtacking4.0 technology."

Hang Lung, a developer from Hong Kong, is branching out due to issues faced by consumers. CEO Weber Lo emphasizes the need for self-improvement and maintaining the relevance of their services.

"We need to better ourselves and ensure our services are suitable," stated Weber Lo, the CEO of the Hong Kong construction company. "Our goal is always to introduce fresh concepts and experiences to our clientele, and that is crucial."

In order to combat these tendencies, Lo stated that the firm needs to construct facilities that accommodate a variety of requirements. They also need to prudently modify the tenant composition in each commercial area, keeping in mind the optimal match.

As an illustration, he mentioned the newly opened Grand Hyatt, located in the Spring City 66 complex in Kunming, which is the capital city of the southwestern province of Yunnan in China. This luxury hotel, with its 331 rooms, adds a premium lodging option to the complex that also includes a shopping centre and a 66-floor office tower. The total floor space of this complex is approximately 168,000 square metres, or 1.8 million square feet.

"Lo stated, 'We strive to enhance the customer experience and set our standards higher. As customers enter our complex, we aim to provide a comprehensive experience. Customers are not just visiting our mall for dining, they might also work here, or have international colleagues staying in our hotel. Hence, we aim to offer an all-encompassing service.'"

Hong Kong shares increase as DeepSeek triggers US tech downfall based on value consideration

Shares go up as investors are predicted to search for less expensive alternatives following the introduction of DeepSeek's widely adopted affordable AI model, leading to a US$1 trillion tech slump.

Shares in Hong Kong increased in value, going against the trend of losses in local markets. This was due to rumors that international investors may start moving away from pricy American tech firms. The cause of this speculation was due to Chinese start-up DeepSeek triggering a Wall Street sell-off with its affordable artificial intelligence (AI) model, which has gained significant popularity.

On Tuesday, the Hang Seng Index experienced a slight increase of 0.1 per cent, reaching 20,225.11, furthering its 0.7 per cent rise from Monday. Tencent saw a 1.4 per cent growth, taking its value to HK$401.20, while Alibaba Group Holding's value rose by 1.2 per cent to HK$88.30. Meanwhile, Baidu's shares leaped by 3.6 per cent to HK$87.80, and Xiaomi, a smartphone and car manufacturer, saw its shares escalate by 3.2 per cent to HK$38.30.

The Hong Kong stock market ended trading at midday in observance of the Lunar New Year and is scheduled to recommence on January 31. Stock markets in the mainland, with their prime indicator CSI 300 experiencing a 3% increase in January, were not operational on Tuesday but will restart operations on February 5.

One hour and eighteen

Trump: The impressive performance of Chinese AI startup DeepSeek is a 'wake-up call' for the US technology industry.

"Considering the emergence of DeepSeek, market predictions suggest a decreased demand for premium chips in the future," stated Kelvin Lau, a financial analyst at Daiwa Capital Markets, in a report. "China will persist in enhancing their production capacity for semiconductors, which will require increased domestic replacement."

'Exceptionally appealing': The reason behind the craze of Chinese consumers for a lesser-known local grocery store

Pangdonglai has demonstrated that traditional physical retail is still thriving in China, as shoppers wait in line for hours outside its stores in anticipation of the Lunar New Year celebration.

On a freezing afternoon in Xuchang, a modest city in the north of China's Henan Province, a relentless wind sweeps across the street, eliciting shudders from the people wrapped up and stooped over on the sidewalk.

However, the consumers are undeterred by the chilly weather. Numerous individuals are queued up outside the shopping center, ready for an extended delay. A sign in close proximity indicates that the mall will remain closed for another hour and a half.

According to an anonymous staff member in charge of managing the line, individuals begin to gather as early as 6am or 7am, a considerable time before the mall's opening hours, due to company policy.

The atmosphere seems akin to the unveiling of a new smartphone, however, the store causing such a stir is actually a neighborhood grocery store called Pangdonglai.

In recent years, Pangdonglai has unexpectedly surged in popularity in China, turning its shops into sought-after spots prior to the start of the Lunar New Year holiday, commencing on January 28.

DeepSeek's technological advancement is celebrated in China as the solution for triumphing in the AI battle. In a post on Weibo, Zhou Hongyi from Qihoo 360 expressed his belief that China will ultimately emerge victorious in the AI conflict with the US.

In their domestic environment, Chinese technology leaders and assorted analysts quickly praised the groundbreaking impact of DeepSeek.

Feng Ji, the founder and CEO of Game Science, the developers behind Black Myth: Wukong, expressed in a popular Weibo post that DeepSeek's advancements in AI have the potential to alter China's destiny amidst its ongoing technological clash with the US.

DeepSeek made a public announcement on January 20, unveiling their open-source R1 reasoning model. They assert that this model matches the performance of OpenAI's o1. According to the American start-up, this model has the capacity to navigate complex tasks and solve more challenging problems in fields such as science, coding, and mathematics compared to its predecessors.

The major advancement by DeepSeek and the plummeting stocks of Nvidia have sparked worries about the necessity for substantial investments in Artificial Intelligence. Big American tech firms might potentially adopt and emulate some of the training strategies that DeepSeek utilized to decrease the price of R1.

DeepSeek, an under-the-radar Chinese start-up offering competitively priced technology that rivals major US tech giants like OpenAI and Meta Platforms, has sparked investor worries about the need for massive investment in research and development.

The AI firm from China unveiled its open-source logic model, R1, in the early part of this month. The aptitude of this model is nearly equivalent to the sophisticated models offered by OpenAI, Anthropic, and Google, but it comes with a much more affordable training expense.

The remarkable ratio of performance to cost has sparked worries among investors regarding the need for the billions of dollars that major US tech firms are investing, along with the additional billions they intend to put into generative AI in the forthcoming years," stated Malik Ahmed Khan, a stock analyst at Morningstar.

He mentioned in a research note on Tuesday that several major American technology firms might consider adopting similar AI training methods that DeepSeek used to reduce the cost of R1.

Upon its release, DeepSeek rapidly rose to become the top downloaded app in Apple's US AppStore. The app's unexpected success led to a significant drop in the stock value of Nvidia and other tech companies on Wall Street on Monday. The company's shares plummeted by 17 percent, dropping to US$118.58, and wiping out nearly US$600 billion in market capitalization.

The story on Monday suggested that the massive amounts spent on AI by massive tech firms could become outdated if a less expensive alternative is available, according to analysts at BCA Research in Montreal. Basically, the defensive barrier around the "Magnificent Seven" US tech titans might not be as broad as once believed, they stated.

Analysts suggest that the management changes at China Vanke indicate a rescue plan for the struggling property developer. Raymond Cheng from CGS believes that backing Vanke may lead banks to provide more loans, decrease markdowns on asset transactions and enhance the confidence of property buyers.

After the announcement of alterations to the board on Monday, Vanke's stocks experienced a significant increase, rising up to 6.89 per cent on Tuesday. However, the gains were later reduced, settling at a closing increase of 2.1 per cent, with a value of HK$5.78.

Vanke, previously the second biggest property developer in China in terms of sales, has appointed Xin Jie as its new chairman. In addition to this role, Xin also holds the position of chairman at the state-owned Shenzhen Metro Group (SZMC), which is the largest shareholder in the company.

Raymond Cheng, the managing director at CGS International, believes that Vanke's primary supporter has enough financial strength to save the developer.

He highlighted that SZMC is supported by the Shenzhen State-owned Assets Supervision and Administration Commission, which has assets exceeding 5 trillion yuan (around US$689 billion). On the other hand, SZMC independently holds assets worth 800 billion yuan.

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Upsurge, downfall, and debt: Has China's real estate market collapsed?

Cheng suggested that a rescue could result in three beneficial shifts for Vanke, such as reassurance for financial institutions to provide loans, decrease in asset sale discounts, and increased confidence from homebuyers in its projects.

The accounting organization in Hong Kong is urging for increased proficiency in sustainable practices. According to a council report, only 21% of Hang Seng Index participants achieved a 'fair' score, while more than half, 53%, were given a 'modest' rating.

Over fifty percent of the companies that make up the Hang Seng Index chose to release their sustainability performance reports last year, says Hong Kong's accounting regulatory organization. They urge companies to further enhance their skills in this area.

The Accounting and Financial Reporting Council reported on Monday that around 21% of the audited companies received a "fair" evaluation from sustainability assurance auditors. In contrast, about 53% were given a "limited" assessment. The remaining companies fell into the "mixed or other" category, according to the report.

Auditors, under the stipulation of reasonable assurance, need to gather enough proof to minimize the possibility of inaccuracies to a level that can be deemed acceptable. On the other hand, with limited assurance, it implies that auditors couldn't find any solid proof to dispute the assertions made by the entity presenting the report.

Research examining market preparedness for sustainability reporting and verification took place from May 6 to 23 of the previous year, during which time there were 82 members in the Hang Seng Index. In addition, the council independently questioned listed companies and auditors about their procedures and future strategies.

The council stated that these organizations claimed that guarantees could boost the confidence of investors, their sustainability rankings, and brand image. The study concluded that the most critical problem identified by listed organizations was the absence of internal expertise in sustainability reporting.

The council anticipates initiating a public discussion regarding a regulatory structure for sustainability verification later this year. In March, the government pledged to be one of the initial regions to harmonize domestic stipulations with the International Financial Reporting Standards for Sustainability Disclosure Standards.