Hong Kong

Hong Kong’s banking regulator has demanded far-reaching powers to prop up or shut failing banks, including the ability to suspend creditor rights, as it plays catch-up with western regulators trying prevent a future Lehman Brothers, the Financial Times reported. The Hong Kong Monetary Authority made the calls in the first public consultation from an Asian regulator on a so-called resolution and recovery regime, which is meant to make financial institutions easier to break up and sell in a crisis.

Debt-laden Titan Petrochemicals Group, controlled by partially state-owned fuel and metals trader Guangdong Zhenrong Energy, plans to present a new debt restructuring proposal to creditors to whom it owes more than US$400 million, the South China Morning Post reported. Titan executive director Patrick Wong Siu-hung said the board believed the debt restructuring plan would be "final", but he would not divulge the proposed "hair cut" - or the repayment discount it proposed on amounts owed.

The Hong Kong government has proposed measures to provide greater protection for creditors and simplify company liquidations in the first reform of the city's insolvency laws in almost 30 years, the South China Morning Post reported. Under the reform, companies are banned from selling their assets at below market prices up to five years before they wind up. Such below-market transactions mean companies can unload all valuable assets and leave too little for creditors such as employees, bankers or suppliers.

With its gleaming shopping malls and omnipresent luxury brands, Hong Kong is an easy place to turn spendthrift. And if a survey last month of 1,000 Hong Kong residents is any indicator, it’s a hard place to hold onto cash, the China RealTime blog reported. Fully two-thirds of primary income earners reported having less than a month’s income saved in the bank. Those numbers come as a surprise, given that Hong Kong is “quite a wealthy zone,” says Peter Barrett, global managing director of lifestyle protection for insurance company Genworth GNW +0.54%, which commissioned the survey.

The Hong Kong government’s toughest efforts yet to curb a growing asset bubble in the city’s property market probably won’t be the last as record-low mortgage rates drive demand for the world’s priciest homes, Bloomberg reported. Policy makers last month imposed an extra 15 percent tax on all home purchases by companies and non-permanent residents, adding to steps to boost the supply of housing and tighten lending as an influx of buyers from other parts of China underpin soaring prices. Untouched is the major stimulant fuelling prices: borrowing costs tied to the U.S.

Bulgarian telecoms operator Vivacom obtained UK court approval to proceed with a 1.7 billion euro ($2.1 billion) debt restructuring, ending two years of wrangling with lenders and failed attempts to sell the company, Reuters reported. Under a deal approved by Mr Justice Vos in a hearing at the High Court in London, Russia's second-biggest bank VTB Capital and Bulgaria's Corporate Commercial Bank (CCB) are buying over 70 percent of Vivacom and existing lenders are writing off 1 billion euros of debts.

Hutchison Whampoa Ltd has made a revised 2 billion euros ($2.6 billion) bid for eircom, the Irish phone company granted court protection from creditors six weeks ago, according to sources familiar with the deal. Hutchison, the parent company of 3 Mobile, amended its offer after the court-appointed examiner overseeing Eircom's reorganization rejected an initial bid over the conditionality attached to it, Reuters reported. A tweaked bid, with some technical adjustments and no conditions, has been resubmitted, but it is still subject to due diligence said a source.

Hong Kong is bracing for more finance-sector job cuts as Western banks, many of which base their regional operations in this business hub, scale back their Asian expansion amid the fallout from Europe's debt crisis and a generally weaker global economy, The Wall Street Journal reported.

China's property prices fell for the fourth straight month in December, adding further pressure on Chinese consumers at a time when both the domestic and global economy increasingly depend on their spending, The Wall Street Journal reported. The property slump has triggered a slowdown in sales growth of goods ranging from furniture to refrigerators. Investment in residential real estate accounts for about 12% of China's economy, but as much as 25% is tied up in a broader category that also includes industries such as construction materials and appliances, according to economists.

Lehman Brothers Holdings Inc. said it settled $20 billion of intercompany claims with liquidators for Lehman Hong Kong and won the affiliate’s support for its liquidation plan, Bloomberg reported. Details of the agreement, which is subject to court approval in the U.S. and Hong Kong, weren’t provided in Lehman’s statement today. Edward Middleton, a partner at KPMG China and one of the Hong Kong liquidators, said in the statement that the settlement will benefit creditors by speeding liquidations.