〈Asian Post, January 13, 2018〉The government of Guang dong province’s capital city will actively participate in forming investment funds for the Guangdong-Hong Kong Macao Bay Area, and consider establishing commercial banks in the Bay Area, Wen Wei Po quoted Mayor of Guangzhou Wen Guohui as saying.

At the opening of the Third Plenary Session of the 15th Guangzhou City People’s Con gress on Thursday, Wen said Guangzhou would apply its core strength in the Bay Area to its full potential this year.

The city will implement the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area and Guangdong-Hong Kong-Macao Bay Area development plan.

The city will actively participate in forming investment funds earmarked for building the Bay Area, and explore the establishment of commercial banks to provide international banking services in the area.

The Bay Area blueprint was officially included in the 13th Five-Year Plan (2016-20) which was approved by the 12th National People’s Con gress in March 2016. The Bay Area roadmap was also clearly outlined in Premier Li Keqiang’s Government Work Report last year.

Wen said Guangzhou will also use the Nansha district to develop cooperation plat forms to speed up industry cooperation between Guang dong province and Hong Kong; the city will also jointly develop innovative ecosystems for technology industries in the region.

Guangzhou will also pro mote cooperation with Hong Kong and Macao to broaden policy alignments in medi cine, higher education, tech nology innovation, legal services, accounting services and intellectual property pro tection. The move aims to attract professional services firms from Hong Kong and Macao to station themselves in Guangzhou, Wen added. Guangzhou should use the Guangzhou-Shenzhen-Hong Kong Express Rail Link as a base when constructing a rap id-transport network in the Bay Area.

〈China Daily, January 13, 2018〉Financial Secretary Paul Chan Mo-po exhibited the right amount of prudence, the quality normally required of someone who manages public finances, when lawmakers at a Legislative Council finance panel meeting on Monday asked him whether the government could help young people climb the housing ladder by lowering the down-payment requirements. While Chan did not give a categorical “no” answer, he cautioned against the potential risk of such a move.

Indeed, helping young people climb the housing ladder by lowering the down-payment requirements for them — as suggested by some, including legislators — is the least-desirable idea now that home prices are at an extraordinarily high level and far beyond their affordability.

Down-payment requirements do not exist without reason. They are intended not only to maintain the stability of the banking sector but also to protect homebuyers in case a major price retreat, or even a collapse, happens in the property market.

It is true the property market is still on an upward trend at present. But the odds of an eventual price reversal are rising as the prospect of higher borrowing costs looms, with the United States’ Federal Reserve stepping up its liquidity tightening campaign. The US central bank has raised its policy rate five times since the end of 2015 to between 1.25 percent and 1.5 percent.

Flooded with cheap money, thanks to capital inflows from overseas markets, banks in Hong Kong have yet to raise lending rates in step with their US peers. But they cannot hold off for long. As the interest-rate gap between the US and Hong Kong dollars widens further while the Fed continues to raise rates — at least three more upward adjustments are expected this year — local banks will eventually be forced to raise theirs also because of the dollar peg system.

〈The Standard, January 12, 2018〉DBS Bank said it would not adjust its property mortgage plan but did not reveal whether the bank will introduce more plans.

Sebastian Paredes, chief executive officer of DBS Bank (Hong Kong), said the rate hike in the US will not seriously affect Hong Kong's property market.

Meanwhile, the bank said it expects the positive trend in 2017 to continue this year. Paredes said the bank's business is very positive at the beginning of this year, with a strong increase in the volume of its lending and deposit businesses. He expects growth of these businesses to remain unchanged as last year.

Paredes also said DBS Bank hopes to double the premium of its general insurance business in three years after entering into a 15-year regional general insurance distribution partnership agreement with Chubb in Hong Kong, Singapore, China and Taiwan.

Elsewhere, HSBC Holdings (0500) made a slew of hires from rivals including Goldman Sachs Group as the bank revamps its equities business in the Asia-Pacific region and expands a nascent majority-owned securities venture in China, people familiar with the matter said.

Among the recent additions are Michael Parry, who joined from Goldman Sachs as a director focused on Asian equity sales, the people said. Other hires include Liu Kang, who was at Goldman Sachs' Chinese partner Beijing Gao Hua Securities, and Jimmy He, who joined HSBC's equity sales team from China International Capital last month, the people said. Both Liu and He will focus on the mainland, they added.

HSBC has been rebuilding its global equities operation since appointing Hong Kong-based Hossein Zaimi to run the business early last year. A key part of the push is the China joint venture, based in Guangdong's financial free-trade zone of Qianhai, which was approved by Chinese authorities in June. HSBC owns a majority of that joint venture, giving it a potential edge over other global banks - although one that could prove short-lived as China prepares to relax ownership rules.

〈The Standard, January 11, 2018〉A 110-square-foot subdivided flat in Tseung Kwan O was leased for HK$9,000 a month - or HK$82 per sq ft - the highest psf rent in the district.

Midland Realty said the en suite - rented by a mainland student - was split from a 1,135-sq-ft unit in the Hemera project from Lohas Park phase three, completed by CK Asset Holdings.

The estate agency said utility bills and wi-fi are included in the monthly rate. The owner bought the flat for HK$10.41 million from the developer in 2015 and is listing another 70-sq-ft room for rent for HK$6,500.

Recent rental deals involved in the development are in the range of HK$24 to HK$29 psf. Hong Kong hosted 12,037 university students from the mainland - which represented 12 percent of enrollment - during the 2016-17 school year, University Grants Committee statistics show.

When the University of Hong Kong surveyed graduates in 2015, it found that 46 percent of its students from the mainland stayed and worked in the city.

Of those who stick around, many are in the financial services, which accounts for about a third of the long-term work visas for mainland professionals.

In light of the government's measures to cool the firsthand property market, some real estate agencies have turned to grabbing opportunities in the mainland student rental market. But despite the agents' increased lobbying efforts in the past several months, the available supply of rental units continues to fall far short of demand.

〈Asian Post, January 10, 2018〉Financial Secretary Paul Chan Mo-po has slightly cooled down the property market saying that interest rates and housing supply may be two major factors curbing prices in the new year. The government pointed out that the average annual private housing supply may reach 20,300 units in the next five years, surpassing the target of 18,000 units in the long-term housing strategy. Latest figures show that the number of applications for pre-sale consents soars. By the end of December, there were about 12,500 units pending approval - the highest in the year.

In his latest financial briefing, Chan pointed out that property sales and prices once eased last year owing to the Monetary Authority further tightening property mortgages and US interest rate hike, but they have recently picked up. He expressed concern that prices have gone beyond what citizens can afford.

Don't let first-time home purchase help become "easing tough measures" In fact, after "property purchases with parental help", a developer recently pointed out that some grandparents were doing the same. It is not reasonable that several generations of a family have to pay for the down payment and service mortgages. But citizens still flock to buy property because of the market uptrend expectations. In addition to investors seeking profits, some people paying high rents, based on their years of experience, are worried that home ownership will become more difficult.

In his reply to legislators, Chan admitted trying to help first-time home buyers, including a study on the reduction of down payment through a mortgage insurance programme. Currently, first-time home purchases under $4 million can enjoy 90 per cent mortgage. With soaring prices, choices are limited. An appropriate upward adjustment of the ceiling is reasonable and pragmatic. But the market may take it as the government "easing tough measures" and stimulate property prices.