Real estate transactions in Hong Kong drop to the lowest in four months due to tariffs and uncertainty over interest rates

January saw a decrease in transactions involving homes, commercial properties, and parking spots as purchasers prepared for global political unrest and a deceleration in rate reductions.

Transactions related to homes, businesses, and parking areas fell by 10.4% to 4,938, and their worth decreased by 14.2% to HK$36.7 billion (US$4.7 billion) compared to the previous month, as per the information released by the Land Registry on Tuesday. The figures reached their lowest since recording 3,843 deals valued at HK$27.7 billion in September.

Compared to the previous year, transactions saw an increase of 12.2 per cent, with their value also going up by 9.1 per cent, as per the information from the data.

Ricacorp Properties predicts that there will be no significant increase in sales this month. This comes as US President Donald Trump instigates what might be the beginning of another tariff dispute involving trade allies like China, Mexico, and Canada. Last week, the Federal Reserve held its main interest rate steady in order to reevaluate inflation and employment market situations.

Two hours and forty

China retaliates against US tariffs, promising to bring the matter to the WTO.

"Derek Chan, the research head at Ricacorp, predicts that the transaction registration volume in February will either remain static or may see a minimal growth," He further stated that property investors have become wary, waiting to see the outcome of the tariff war.

The UK court has approved the debt strategy of Chinese developer, Sino-Ocean. This decision could potentially set the stage for the company's success in a forthcoming liquidation lawsuit in Hong Kong later this month.

Chinese real estate company, Sino-Ocean Group, burdened with debt, received approval for its financial restructuring plan from a UK court on Monday. This decision was made in spite of opposition from some lenders, potentially setting the stage for the company to succeed in a liquidation case in Hong Kong.

The London High Court has sanctioned a restructuring plan proposed by a construction firm, enabling the state-supported entity to restructure around $6 billion of debt. First suggested in July, the proposal faced opposition from a spontaneous assembly of creditors.

The developer, whose major stakeholders include state-supported China Life Insurance and Dajia Insurance, plans to repay its lenders by releasing US$2.2 billion in long-term bonds along with an amalgamation of mandatory convertible notes and perpetual securities.

Justice Nicholas Thompsell expressed strong belief in his verdict that the division of worth in this situation is considerably equitable concerning all creditor groups involved in the plan. He further noted that the plan might seem excessively favorable to shareholders, but it's justified considering that maintaining the company's public ownership enhances the plan's value for every creditor category, more than what they would benefit from any other plan.

Shares of Sino-Ocean in Hong Kong saw an increase of 18 per cent, reaching HK$0.26 on Tuesday.

The UK court has approved the debt strategy of Chinese builder Sino-Ocean. This decision could set the stage for the firm to come out victorious in an impending bankruptcy case in Hong Kong later in the month.

Sino-Ocean Group, a debt-laden Chinese developer, received approval for its reorganization plan from a UK court on Monday. This happened even though some creditors objected, and it could potentially clear the path for the company to succeed in a liquidation lawsuit in Hong Kong.

The High Court of London has given the green light to the builder's offshore restructuring plan, enabling the government-supported firm to reorganize around US$6 billion in debt. Initially presented in July, this proposition faced opposition from a spontaneous assembly of creditors.

The development firm, supported by significant stakeholders like China Life Insurance and Dajia Insurance, plans to reimburse its creditors. They intend to do this through the release of long-term bonds valued at US$2.2 billion, along with a mix of obligatory convertible notes and everlasting securities.

Justice Nicholas Thompsell expressed unwavering confidence that the proposed value division among all creditor classes involved in the plan is significantly equitable. He acknowledged that the plan might be overly favorable to shareholders, but justified this by saying it was for a valid reason. Maintaining the company's public ownership status, he said, enhances the plan value for every creditor group more than any other potential plan would.

Shares of Sino-Ocean in Hong Kong increased by 18 per cent, reaching HK$0.26 on Tuesday.

Viewpoint | Trump's ban on digital dollar paves the way for the rise of China's yuan

The US president's choice to stop CBDC progression could unintentionally speed up the movement away from the dollar, facilitating the global acceptance of the yuan.

On the 23rd of January, Donald Trump, the President of the United States, initiated an executive order to form a task force for developing regulations for digital assets. Interestingly, this order also enforced a prohibition on the development of a digital currency by the US central bank, thereby putting a stop to the plans to develop a digital equivalent of the dollar.

The World Economic Forum underscored in April of the previous year that more than 98% of the world's central banks were engaged in the creation of a Central Bank Digital Currency (CBDC). However, considering the US ban on CBDC development, this percentage has potentially decreased.

Though there are already solutions such as FedNow, an instant payment platform supported by the Federal Reserve launched in 2023, for local US transactions, a Central Bank Digital Currency (CBDC) could significantly improve international trade and immediate settlements for everyone, from individuals to institutions to governments.

Commentary | Trump's prohibition on digital dollars paves the way for China's yuan

The American president's choice to stop the progress of Central Bank Digital Currencies (CBDC) could unintentionally speed up the diminishing dominance of the dollar, making way for the global acceptance of the yuan.

On the 23rd of January, the American President, Donald Trump, authorized an executive order to establish a task force to develop regulations for digital assets. Interestingly, this directive concurrently prohibited the development of a digital currency by the US central bank, essentially putting a stop to the plans for creating a digital form of the dollar.

According to the World Economic Forum's report from April of the previous year, central banks of more than 98 percent of the world's economy have participated in creating a CBDC. Nonetheless, due to the United States' ban on CBDC development, this percentage has presumably decreased.

Though there are existing services such as FedNow, an instant payment service supported by the Federal Reserve and launched in 2023, for internal U.S. transactions, a Central Bank Digital Currency (CBDC) could greatly improve international commerce and provide immediate transaction resolution for individuals, organizations, and governments.

Trump's tariffs drive up gold prices to an all-time high as investors look for secure investments.

Worries among investors about a possible worldwide trade conflict have led to a significant rise in gold prices.

On Monday, the value of gold skyrocketed to an all-time high as investors turned to reliable assets in the face of unpredictability triggered by the tariff strategies of US President Donald Trump and persistent worries about inflation.

On Monday, the cost of global spot gold increased by 0.57 percent, reaching US$2,813.34 per ounce, following an earlier all-time high of US$2,830.49 during the same trading period.

The positive trajectory persisted into Tuesday, with the price of gold reaching US$2,819.46 per ounce by the morning.

The cost of gold products in China has been on an upward trend since the start of the year. Prominent jewelry brands like Chow Tai Fook and Chow Sang Sang announced on Tuesday that their prices have exceeded 850 yuan per gram, which is equivalent to US$3,325 per ounce.

"Citic Securities analysts stated in a research note on Monday that the escalating trade conflicts have dramatically increased the avoidance of market risk, pushing gold prices to record levels. They suggested that any further amplification of trade frictions will continue to stimulate the rise in gold prices."

Global central banks, such as those in China, Russia, India, and the United Arab Emirates, have been boosting their gold reserves lately. However, the surge in demand for secure assets took off when Trump declared on Saturday that the US would put tariffs on goods imported from Canada, Mexico, and China.

Guming, the major Chinese bubble-tea company, aims to raise US$200 million in Hong Kong's Initial Public Offering (IPO). The firm, trading under the "Good me" brand, plans to offer 158.6 million shares with each priced between HK$8.68 and HK$9.94.

Guming Holdings, a Chinese company specializing in bubble tea beverages, plans to generate as much as HK$1.58 billion (equivalent to US$202 million) through an initial public offering (IPO) in Hong Kong. This marks the first IPO of the Year of the Snake.

Guming revealed in a regulatory filing on Tuesday that it plans to sell 158.6 million shares between HK$8.68 and HK$9.94 each. The final cost per share will be set by Friday, and the shares will become publicly traded on February 12.

The business, trading as Good me, ranked as the biggest mid-range fresh drink vendor in China in terms of gross merchandise value (GMV) and number of outlets in 2023. In the initial three quarters of 2024, there was a 20% yearly increase in GMV, reaching 16.6 billion yuan (US$2.3 billion). Concurrently, the expansion of its outlet chain saw an 8.6% growth, totalling 9,778 stores.

According to its report, Guming saw a year-on-year profit increase of 11.8% in the first three quarters of the previous year, reaching 1.1 billion yuan. This figure exceeded the total profit for 2023.

The Initial Public Offering has drawn the interest of five key investors who have collectively poured in US$71 million. Huang River Investment, fully owned by Tencent Holdings, has contributed US$25 million to this total.

Henderson Land is set to roll out 12 new projects, consisting of 5,400 units, this year, due to a positive market outlook. The real estate company asserts that there is a considerable demand for housing and that decreased rates will result in smaller mortgage payments.

The second stage of Belgravia Place located in Cheung Sha Wan, which contains 248 apartments, is anticipated to be introduced this month, according to Thomas Lam Tat-man, the head of the sales division.

Mark Hahn Ka-fai, a general sales manager, has announced plans to unveil a 300-unit project on Nam Kok Road in Kowloon City within the first three months of the year. Furthermore, a massive 2,060-unit development is also set to be launched at 18 Shing Fung Road in Kai Tak.

Upcoming projects include two phases consisting of 881 apartments at 72 To Kwa Wan Road, another 240 apartments in phase C1 at MidTown South in Hung Hom, as well as a high-end development at 29A Lugard Road on The Peak.

Lam stated that there was a significant need for housing and decreasing rates would result in lesser mortgage payments, enabling a greater number of investors to participate in the market.

He anticipates that the initial six months of the year will kickstart the real estate market, with a probable upswing in property values beginning in the latter half of the year. He also projects that primary real estate transactions could total around 20,000 units this year.

Xiaomi's market worth surpasses HK$1 trillion as optimism grows over its EV industry

The smartphone producer enjoys the rewards of branching out into EV production as the queue of orders increases.

For the first time, Xiaomi's market worth surpassed HK$1 trillion (US$128.4 billion) following a record high spike in its stocks. This success is due to the company, being China's third-largest smartphone producer, reaping rewards from its expansion into the production of electric vehicles (EV).

The firm's stock value increased to a peak of 5.7 per cent, reaching HK$40.10 in Hong Kong on Tuesday, pushing its fundamental market value past a trillion dollars. However, by the end of trading, the shares settled at HK$39.55, reducing its worth to HK$992.9 billion. The Hang Seng Index also saw a notable rise of 2.8 per cent, fueled by optimism that a trade conflict might be prevented.

According to a recent filing on January 13, Xiaomi has listed 20.59 billion Class B shares on the local stock exchange. Additionally, the company's founder, Lei Jun, holds control over 4.52 billion unlisted Class A shares. Each of these shares carries 10 votes and has the potential to be converted into Class B shares on a one-to-one ratio.

"The share value mirrors its robust underlying elements," Kenny Ng, a strategist at Everbright Securities International, stated. He added that considering the upward trajectory and enhanced investment mood, the stock was predicted to do well in the near future.

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China retaliates against US duties, promising to bring the matter to the WTO.

The demonstration occurred in light of a positive outlook on its automobile industry, unaffected by the intensifying trade conflict between the US and China, as the two largest global economies gear up for another trade battle with export tariffs. The firm primarily earns its income domestically, with a mere 3 per cent originating from the US, as per Morningstar's data.

The actual expenses and computational capabilities of AI startup DeepSeek are under scrutiny as chip stocks take a hit. Significant investments in GPUs by the hedge fund responsible for launching DeepSeek have led some to question the firm's genuine operating costs, even as they recognize its innovative efforts.

In a research article about its DeepSeek-V3 large language model (LLM), launched in December, the Chinese tech newbie announced that the training required merely 2.8 million “GPU hours,” costing around US$5.6 million. This is considerably less time and financial investment than what American companies have typically dedicated to their own models.

On January 20, the company unveiled DeepSeek-R1, their open-source reasoning model, which has shown abilities that are on par with more sophisticated models from OpenAI, Anthropic, and Google. However, it stands out due to its considerably lower training expenses. The R1's research paper did not discuss the costs involved in its creation.

Five past ten

Chinese AI innovator DeepSeek has secured the leading position in the US App Store, surpassing ChatGPT.

Records from DeepSeek and its partner hedge fund, High-Flyer Quant, indicate that the company is a leading source for AI training. Back in 2019, High-Flyer's founder, Liang Wenfeng, who also founded DeepSeek, invested 200 million yuan (approximately US$27.8 million) in acquiring 1,100 graphics processing units (GPUs). These were used to develop algorithms for stock trading. According to the company's own documents, High-Flyer's computing center at that time was as large as a basketball court, approximately 436.6 square meters or 4,700 square feet.

In 2021, the fund allocated 1 billion yuan towards the advancement of its supercomputer network, Fire-Flyer 2, projected to achieve a computing power of 1,550 petaflops, as stated on the High-Flyer's website. This capacity is comparable to some of the strongest supercomputers globally.

Bitcoin's value drops under $100,000 due to market instability caused by Trump's tariffs

The American President enforced a 25 per cent tariff on most imports from Mexico and Canada, as well as a 10 per cent tariff on Chinese products, taking effect from Tuesday.

The value of cryptocurrencies plummeted as the looming threat of a worldwide trade conflict unsettled investors, prompting them to move away from high-risk assets.

Digital currencies are traded continuously, even on weekends, and have recently shown sensitivity to the overall mood in the markets.

Investors believe that tariffs have the potential to negatively impact economic growth and corporate profits

"Crypto is essentially the sole method to convey risk during the weekends, and with news such as this, crypto becomes a risk indicator," stated Chris Weston, lead researcher at financial brokerage firm Pepperstone.

The use of Yuan for trade financing in Hong Kong is increasing as companies look for cost savings in the midst of US-China disputes. The lower financing costs of the Chinese currency and increasing offshore liquidity, along with a new platform, are enhancing its attractiveness.

The utilization of the yuan in trade finance is on the rise as businesses aim for cost savings and diversification of their supply chain in light of the ongoing US-China conflicts and enhancements in the currency's offshore fluidity, say leading financiers in Hong Kong.

"Since 2023, there has been an increased demand from businesses for trade financing in yuan, in the wake of US dollar rate increases," commented Wu Bin, who leads trade and working capital sales for Citi in Japan, North Asia, and Australia.

The pattern persisted into the previous year when China reduced its interest rates even more, he stated. He pointed out that there's a growing preference among internationally operating mainland firms to utilize the yuan for trade finance. This is primarily to manage the instability of foreign currencies and to optimize costs.

It is anticipated that the yuan will continue to have lower financing costs, as the disparity with the US remains significant due to the Federal Reserve's slower than anticipated reductions in interest rates.

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US President Donald Trump mellows down on potential China tariffs

Standard Chartered's Carmen Chan, who is in charge of trade and working capital for Greater China and North Asia, stated that there's a growing trend of using the yuan in trade finance. This trend is especially notable in industries like electric vehicles, solar panels, and engineering, procurement, and construction.