Hong Kong

Corporate insolvency is expected to rise this year in the mainland and Hong Kong, with an increasing number of companies struggling to protect margins from late payments by customers, the South China Morning Post reported. Even as the economy continues to grow at a relatively good pace, mainland firms are grappling with a state-driven shift in economic structure. This would inevitably lead to shrinking business opportunities in sectors such as construction, cement and steel, pushing up defaults in these areas, said Dutch trade credit insurer Atradius.

The government's student loan scheme is open to exploitation, the Ombudsman said, highlighting 13,000 default cases recorded over the past three years involving at its peak HK$200 million in unpaid debts, the South China Morning Post reported. Over half of the unpaid debts came from the extended non-means-tested loan scheme, which offers loans at lower-than-market rates - mostly to the working population to enrol in part-time courses.

Eighty-six years old and still job hunting. Wong Siu-ying had to stop passing out leaflets on a Hong Kong flyover when she hurt her knee in August. With two-thirds of her social security income spent on rent and no steady allowance from her three children, retirement isn’t an option, the Irish Times reported. “It isn’t enough,” Wong said of the roughly HK$2,200 ($284) a month she gets from the government, which provides a benefit to the elderly as a supplementary income, with the expectation families will pay for living expenses.

A surge in business loans to the slowing mainland Chinese economy has prompted Hong Kong regulators to impose strict financial rules four years before they are required under new global standards, the International New York Times DealBook blog reported. The move is aimed at discouraging banks in Hong Kong from raising money by relying too heavily on short-term funds that can evaporate during periods of tumult. But big global banks have been resisting, over fears that the rules will cut into their profit by driving up loan costs.

A Hong Kong businessman intensified his fight for Fisker Automotive, the bankrupt maker of the plug-in hybrid Karma sports car, seeking an immediate appeal of a ruling that had opened the door for China's Wanxiang Group as a bidder, Reuters reported. The legal team of the businessman, Richard Li, filed an emergency motion late Tuesday seeking permission for a fast-track appeal of a ruling requiring some cash bidding, a day after Li raised his bid for Fisker to $55 million. Without cash bids, Wanxiang did not plan to join the auction. The auction could be held as soon as Feb.

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.