Archive for 四月, 2012
Despite the recent city’s stock market rally which topped the world in attracting new listings in previous years, Hong Kong’s stock exchange may not be favored again by large initial public off erings this year, but the bourse’s fund raising allure will continue. Li Tao reports.
Full report:
http://www.chinadaily.com.cn/hkedition/2012-04/08/content_14998592.htm
Office rentals in Hong Kong are expected to extend their slide this quarter after falling 5.2 percent last quarter as demand shrinks sharply in the prime business district amid lukewarm market sentiment and a consolidation in the financial sector, a property consultant said.
The sizable decline was largely underpinned by the 10.9 percent quarter-on-quarter, or 10.4 percent year-on-year office rental slump in the prime Central area, according to international property consultant Cushman & Wakefield.
Rentals fell to an average of HK$105.4 per square foot a month in the first quarter of this year — a pre-2011 level, the advisor said.
Rents of Grade AAA offices in Central decreased by 13.3 percent to HK$123.3 per square foot in the first three months over the previous quarter, representing an 18 percent year-on-year rental decrease from HK$150.3 per square foot in the first quarter of last year.
The lukewarm market sentiment along with the consolidation in the financial sector facilitated the sharp demand decline for office space in Hong Kong, particularly in Central where financial and professional sectors are heavily exposed.
The office availability rate increased to 6.2 percent in the area, the highest level seen in the district since early 2010, compared with the city’s overall office availability of 4.7 percent during the period.
“Landlords have precipitately cut rents as leasing activity has slowed considerably due to weakness in the global economy and difficulties facing the banking and finance industry. The continued murky outlook for the remainder of the year has enticed landlords to slash rents in order to secure and retain tenants,” said John Siu, executive director of Cushman & Wakefield (Hong Kong).
Siu forecasts the office rents in the Central area to further decline by 5 to 10 percent in the coming three quarters unless financial market and economies improve substantially in the West.
It is in line with another report by property advisor Knight Frank released on Tuesday, which pointed out that Hong Kong’s Grade A office remained the weakest property sector as corporates continued to scale back their operations resulting in sluggish leasing activity.
Thomas Lam, head of research at Knight Frank in Greater China, who expects the prime office rents to drop a further 10 to 15 percent in the remainder of 2012, added that rents in non-core districts will remain firm thanks to low vacancy levels and sustained relocation demand.
Other than the downward trend of the office rents, Cushman & Wakefield on Tuesday also estimates that prices of Hong Kong’s mass home market to decline by 10 percent to 15 percent throughout the year.
Despite transactions involving 11,358 apartments in March, overall home sales have declined 35 percent in the first quarter of 2012 over last year. This reflects the city’s property market “continues to be stagnant under the government measures and (the) dragging economic recovery,” said Vincent Cheung, national director of valuation and advisory of Cushman & Wakefield (Hong Kong).
http://www.chinadailyapac.com/article/office-rentals-tipped-fall-further-q2
China Life Insurance (Overseas) Co Ltd, the Hong Kong unit of China Life Insurance Co Ltd, announced on Monday that it has gained approval to become the first overseas insurance company to enter the mainland interbank bond market.
The People’s Bank of China (PBOC), which gave the green light to Hong Kong unit, also offered similar approvals to a number of other insurance companies with similar backgrounds that are expected to join market league.
The amount approved this time will be sufficient to meet China Life Insurance (Overseas)’s development plan for the year, Liu Ting’an, president of the company’s Hong Kong unit said during a media briefing in the city, but he did not disclose the investment quota awarded to the company.
According to data from Shanghai Clearing House Co Ltd, the market as a whole is worth as much as 20 trillion yuan ($3.17 trillion).
Since returns from the mainland bonds market generally amount to between 3 to 5 percent at the moment, higher than that in the city, the new arrangement will allow China Life Insurance (Overseas) to tap high quality corporate bond and enrich the variety of its yuan-denominated products, Liu said.
Back in December 2010, Hong Kong Monetary Authority Chief Executive Norman Chan revealed that the mainland may open the interbank bond market to Hong Kong insurers as part of efforts to internationalize its financial markets and the yuan. But the approval process for insurance companies was slower over the period compared with other sectors.
As hopes for larger yuan appreciation started to fade, the city’s yuan deposits growth slowed, or even retreated since the second half last year, after the size expanded nearly tenfold between the start of 2010 and November 2011 in Hong Kong, according to the Hong Kong Monetary Authority’s data.
Premier Wen Jiabao said in March that the yuan might have already reached an “equilibrium” level judging by the trading situation in Hong Kong since September. Wen added that the government will allow relatively greater two-way fluctuation in the currency.
Liu, nevertheless, believes yuan-denominated products will stay appealing to the consumers as “yuan’s long-term strengthening trend will stay unchanged.”
He added that the Hong Kong unit expects its yuan-denominated new policies to account for over one third among all the new policies within three years, from about 15 percent at this stage. Liu also expects the unit’s total premium to increase by 30 percent this year.
The Chinese currency fell 0.19 percent to close at 6.3150 per dollar in Shanghai, the biggest decline since April 5 on Monday, after the PBOC doubled the daily trading band to allow 1 percent moves from a daily fixing.
In Hong Kong’s offshore market, the yuan also declined 0.18 percent to 6.3110 per dollar on the same day.
Hong Kong’s group-buying market, despite booming rapidly when it first started,has found lackluster receptivity from the city to this particular type of e-commerce,compared with other developed markets.
Danny Yeung, chief executive officer of an online deals provider Groupon Hong Kong, said perhaps one of the main drawbacks of this type of e-commerce is that the city’s consumers still have to print out the on-line purchase voucher on paper for redemption at a store or to enjoy a discount for a meal at a restaurant. This probably explains it.
On the mainland, online-coupon providers will send a string of numbers to the buyers through short messaging system (SMS) via their mobile phones. Then consumers only need to display the codes at an outlet or restaurant and the dealers will verify it through a computer to conclude the transaction or to provide a discounted meal.
“It may surprise you, but many of the Groupon dealers in Hong Kong do not even have computers,” Yeung told China Daily during an interview, adding that city’s population density and the convenient shopping environment hindered merchants as well as consumers’ deployment via e-commerce.
Technically it is simple for Groupon to provide digital codes to the consumers. However, some merchants in the city still insist on receiving a paper voucher as they are unable to conduct real-time verification. On the other hand, Groupon also insists that all the merchants print out vouchers for all purchases made on paper too compounding the matter.
Hong Kong people are known for being less keen to shop online. According to a research conduct by the Boston Consulting Group in 2011, despite the city’s broadband speed being one of the fastest in the world, people’s Internet expenditure, which includes e-commerce, is well below average for developed countries.
Compared with South Korea and Japan where almost 96 percent and 97 percent of the population are engaged in online transactions, Hong Kong’s 60-odd percent Internet buyers are left far behind, Yeung said, adding that the local people’s e-commerce awareness also lagged consumers on the mainland.
In March, a report released by an independent research institute China E-Commerce Research Center indicated that a total of 203 million people participated in online shopping on the mainland last year, up 28.5 percent from the previous year. Total online retail sales reached 801 billion yuan last year, a sharp increase of 55.8 percent from 514 billion yuan ($81.7 billion) a year earlier, the report said.
Carrie Yu, PwC’s retail and consumer leader for China and Asia Pacific, said online shopping in the city is not as active as on the mainland partly due to the fact that many households have domestic helpers to do the grocery shopping.
“Moreover, store shopping and browsing is considered a social pass-time. However, we see online retail is becoming increasingly popular. This is particularly relevant for apparel, health and beauty products,” said Yu.
Despite the Boston Consulting Group’s study projecting a lukewarm 7 percent annual growth of Hong Kong’s Internet economy, consisting of online shopping, e-commerce, and investments in the Internet, the CEO of Groupon Hong Kong, said the advantages of group-buying websites are obviously offering great deals for both the merchants and consumers, due to its unique operation mode.
The website offers online consumers various kinds of products through dining to daily necessaries to travels, with favorable amounts of discount. Meanwhile, merchants advertise their products on high-traffic websites, while still making a fortune. Groupon Hong Kong will share the profits gained in the transaction evenly with the merchants, according to Yeung.
Yeung, who defines the group-buying website more as a “marketing channel” rather than a “sales channel”, said Groupon offered more exposure at a lesser price compared with spending HK$700,000 for a 30 seconds commercial slot on TV or HK$40,000 for a spread in a local magazine.
However, Yeung refused to disclose the website’s traffic as well as the number of active members Groupon Hong Kong currently owns, citing its “global guidelines”. The Hong Kong subsidiary, formerly known as uBuyiBuy.com, was acquired by the global online coupon-market leader Groupon in 2011. Groupon claims to own over 33 million active customers as of Dec 31, 2011 in 48 countries and regions worldwide.
Data from the research provider Experian Hitwise shows that Groupon Hong Kong remains the market leader in the city by mid-March 2012 with 54 percent market share, compared with its 62 percent dominance in April 2011, signifying a fierce competition in the market. Some local news reports said the city’s consumer group-buying market is estimated to generate revenues of $60 to $70 million each year, with more than 80 players now offering daily deals in the market.
George Sun, PwC’s consulting associated director believes the overall business model of group-shopping still needs to be optimized as the current business model is basically a purchase of consumer base model, while the initial thinking was to use the model to develop a consumer base quickly to integrate off-line resources.
“From the consumer side, the group-shopping businesses are not able to develop customer loyalty and regular buying behavior. From the supplier side, the manufacturers are reluctant to sell a broad range of products through group-shopping companies. Therefore it is still very difficult to integrate the off-line resource,” Sun added.
http://www.chinadailyapac.com/article/group-buying-faces-many-challenges-hk-market
Hong Kong’s banking system remains stable as resilient domestic consumption and investment will offset the drag from continued weakness in external demand, Moody’s said in a report on Thursday.
“Hong Kong banks’ credit ratings continued to be supported by their solid financial fundamentals, with sound capitalization, good profitability, and maintenance of strong asset quality metrics,” said Sonny Hsu, a senior analyst from Moody’s.
He noted that the outlook expresses Moody’s expectations for the fundamental credit conditions in this system over the next 12-18 months.
“We expect sustained economic growth in the territory to provide an accommodating operating environment for Hong Kong banks, despite continued weakness in external demand,” Hsu spoke as a report titled “Hong Kong’s Banking System Outlook” was released on Thursday.
The rating agency, meanwhile, expects the sluggish trade performance to persist throughout this year posing challenges to the city’s economy and its banking environment.
Loan growth is forecast to moderate in 2012 after fast growth in the previous two years, as underlying credit demand is capped by various economic and policy developments.
Moody’s named a number of unfavorable factors to lenders’ loans growth in Hong Kong, including the weakening trade performance, ongoing government measures on the property market as well as slowed yuan appreciation and loosened monetary policies on the mainland, which also lessened loans demand.
The risks of property bubbles in Hong Kong remains following the roughly 70 percent gains in the city’s average home prices in the past three years, while any severe correction in the housing market should only have a limited direct impact on banks’ asset quality, as Hong Kong banks have consistently underwritten mortgages conservatively with current mortgage loan to value ratios well below 50 percent, Moody’s said.
It believes most of the city’s lenders are able to absorb expected losses under adverse scenario given their solid capitalization and good liquidity profiles. The operating environment, despite the likelihood of being a challenging year, is not going to deteriorate severely as Moody’s expects continued economic expansion this year.
The Moody’s report is consistent with another rating agency, Fitch’s forecast in March, which said Hong Kong banks are in good shape to weather a cyclical downturn despite rising risks.
Fitch favored the city’s banks for their strong positions to absorb potential losses stemming from a global economic slowdown, including the expected slower economic growth on the mainland. However, the rating agency warned that impairment charges are likely to rise from current low and unsustainable levels.
Moody’s also expects Hong Kong banks’ profitability to remain stable, with net interest margins (NIM) likely to widen modestly in 2012 as pressures on funding costs ease amid easing credit demand.
JP Morgan in an April 1 report said it turns less bearish on Hong Kong banks as “deposit rate fell, bond spreads narrowed, yuan stopped appreciating, and property transactions returned”. The investment bank also expects Hong Kong banks’ NIM to start recovering in the first half this year.
http://www.cdeclips.com/en/hongkong/City’s_banking_system_stable_Moody’s/fullstory_73018.html
The Asian arm of Las Vegas Sands Corp opened the Cotai Central resort in Macao, equipped with a 300,000-square-foot casino and 5,800 hotel rooms that are tailored for the tens of million visitors each year, including over half of them from the mainland.
Edward Tracy, chief executive officer of Sands China, believes that the Macao gaming market growth is primarily driven by capacity, or in another word, investment.
“The more supply there is, the more demand will grow (in the market),” Tracy told China Daily on Wednesday.
But the gambling business is now expanding at a slower pace in Macao, after the Chinese territory, which is also the only place in China where casino gambling is legal, has witnessed a 42 percent jump in gambling revenue in 2011 — almost six times the Las Vegas Strip’s revenue for the same period.
According to data released by Macao’s Gaming Inspection and Coordination Bureau in April, for the first three months of 2012, accumulated gaming revenue reached 74.31 billion patacas ($9.3 billion), representing an increase of 27 percent from the same period last year. It compared with the 43 percent revenue growth in the first three months of 2011 over the previous year.
Tracy admitted that the double-digit growth period in the gaming sector was over. But he said that a business, which is likely to expand between 20 to 25 percent a year, was still the one he would put all his money into.
Kenny Tang, an Hong Kong-based analyst from AMTD Financial Planning Ltd, said the new casino opened by Galaxy Entertainment Group Ltd last year brought about a spillover effect to the whole industry, which is also likely to happen this time, in terms of attracting more visitors.
“The market has yet to saturate as the Macao government is controlling the number of gambling tables to prevent oversupply in the city,” Tang told China Daily in a telephone interview.
In a Haitong Securities report dated April 3, analyst Donald Cheng expected stronger gaming revenue figures in Macao bolstered by the launch of Sands China’s Cotai project as well as the mainland’s week-long Golden Week holiday in May.
A CLSA report in 2011 forecast Macao’s gaming revenue to grow by 20 to 25 percent in 2012 and 2013, and 11 to 15 percent in 2014 to 2020 on “rising incomes and booming outbound mainland tourism, supported by significant infrastructure improvements”.
Macao government’s tourist statistics show that 28 million passengers entered Macao last year, including 57.1 percent, or 16 million of the passengers from the mainland.
The mainland visitors were also the most generous spenders in Macao, with the per-capita spending overnight and on the same-day reached 4,239 patacas and 813 patacas respectively, according to a visitor expenditure survey for the fourth quarter of 2011.
Kunlun Energy Co, a mainland gas supplier controlled by PetroChina Co, is raising about HK10.4 billion in new capital by selling shares to investors to accelerate its liquefied-natural gas (LNG) expansion.
A total of 800 million primary shares are being offered at HK$13.10 each, a 7.62 percent discount to Monday’s close of HK$14.18, the company said in a filing to the city’s stock exchange on Tuesday.
After the share placement, PetroChina’s stake in the company will be diluted to 62 percent from 69 percent. Deutsche Bank is the leading global coordinator. CICC, Citi, Bank of America Merrill Lynch, Morgan Stanley and UBS are the placing agents.
The share placement is tailored to further develop Kunlun’s LNG business, the company said in the statement. In an earlier filing to the stock exchange, Kunlun announced that it seeks to become the China’s biggest onshore LNG supplier and producer within the next two years. The company is building 15 LNG plants in Chinese provinces and regions including Inner Mongolia, Xinjiang and Qinghai.
Kunlun shares declined 3.1 percent or HK$0.44 to close at HK$13.74 on its Hong Kong trading on Tuesday, compared with the 1.31 percent gain of the city’s benchmark Hang Seng Index.
Alvin Chung, associate director of Prudential Brokerage, indicated the stock de facto rose from the HK$13.50 on its opening in Tuesday, a 4.8 percent slump from the earlier trading after the company announced the mega share sales.
“It seems investors also give approval to this share sales, given that capital raised is solely for business expansion and the prospect is positive,” Chung told China Daily in a telephone interview.
In March, Kunlun posted record full-year sales of HK$25.4 billion and net profit of HK$5.61 billion, up 46.5 percent and 33.7 percent from 2010, respectively. Its Hong Kong-traded shares gained more than 24 percent this year, outperforming the city’s benchmark Hang Seng Index, which rose over 12 percent.
In a March report released by South China Research Ltd, analyst Kaiser Choi expected the natural gas consumption to benefit from China’s plan as combustion of natural gas releases fewer pollutants over traditional fuels such as coal and oil, which is in line with China’s objective of environmental protection and achieving sustainable development.
“As Kunlun’s earnings exposure to exploration and production is the highest among peers while its exposure to gas distribution is the smallest, we select it as our top pick,” Choi wrote in the report.
The booming LNG business is now targeting China’s tens of thousands of trucks, city buses and fishing boats as users. It aimed to service an ambitious 10 percent of the transport diesel market in the country by 2015, Reuters said last week.
http://www.chinadailyapac.com/article/kunlun-raise-hk104b-share-sale
Hong Kong’s economic growth is expected to accelerate to 3.1 percent in the second quarter from 2.3 percent in the first quarter, supported by a rebound in external demand, the University of Hong Kong economists forecasted on Monday.
The 2.3 percent GDP growth estimates for the previous three months was slightly higher than its previous projection on Jan 4 when the university forecasted a 2.2 percent GDP growth for the period, according to the university’s quarterly Hong Kong Macroeconomic Forecast.
For the first half of this year, Hong Kong’s real GDP is projected to grow by 2.7 percent, as compared with the 6.5 percent growth recorded for the same period last year, according to the forecast of APEC Studies Programme at the Hong Kong Institute of Economics and Business Strategy (HKIEBS) of the university.
The distinct slowdown can be attributed to the contraction in external demand due to the European sovereign debt crisis, said Alan Siu, executive director of the HKIEBS at the HKU.
According to the forecast, the city’s common income growth will assist private consumption spending to continue expanding this year, although, at a slower pace, with growth rate forecast to expand 4.7 percent in the first quarter and decelerating to 3.7 percent in the following three months due to a slowing economy.
Retail sales volume are also expected to grow by 8.9 percent and 7.9 percent for the first two quarters of 2012, supported by robust local demand and strong visitor arrivals growth, compared with 10.1 percent growth in January.
The job market is projected to be stable with the unemployment rate forecast to be 3.4 percent in both the first and second quarter of 2012.
Inflation pressure is expected to ease further, and the headline consumer inflation rate is forecast to moderate to 4.2 percent in the current quarter, down from the estimated 5.1 percent in the last quarter, according to the report. In 2011, the jobless rate and headline CPI stood at 3.3 percent and 5.3 percent respectively throughout the year.
“But the resolution of sovereign debt in Greece, continued economic recovery in the US, robust growth on the mainland, on-going infrastructural projects and the low interest rates environment will provide support for continued economic growth in the current year in Hong Kong,” Siu indicated during a media briefing on Monday.
He expected the total exports to turn around and grow by 4.3 percent in current quarter after contracting by 2.4 percent in the first three months this year.
Siu said he also lifted Hong Kong’s full year GDP growth forecast to 3 to 4 percent for 2012, from the 2 to 3 percent estimation made earlier.
A Hang Seng Bank report released in mid-March said the city’s economy may contract in the first three months of 2012 as domestic demand showed signs of cooling and external trade activities slowed.
“We anticipate headline growth to decelerate to a year-on-year rate of below 2 percent and a quarter-on-quarter contraction seems inevitable,” economists Ryan Lam and Joanne Yim from the bank wrote. “With external demand weakening and on-going uncertainties arising from the euro area debt crisis, we expect a modest pullback in job creation and the unemployment rate to rise modestly as the year progresses.”
For the year as a whole, Hang Seng Bank nevertheless maintained its GDP forecast of 3 percent, compared with the forecast of 1 percent and 3 percent growth made by the government earlier.
http://www.chinadailyapac.com/article/hong-kongs-q2-economic-growth-tipped-rise-hku
The Export-import Bank of China (Exim)’s 4 billion yuan bonds offer in Hong Kong was more than four times oversubscribed, a sign that investors’ appetite for yuan assets remains strong despite recent concerns about weaker yuan appreciation outlook.
This bond sale comprises 3 billion yuan two-year notes with a 2.7 percent coupon, and a 1 billion yuan three-year debt paying 2.9 percent interest, according to the bank.
It is Exim’s fourth yuan bond issue in Hong Kong after sales in 2007, 2008 and 2010 respectively, Exim Bank Chairman Li Ruogu said in a media briefing on Friday. All the funds raised this time will be deployed outside the mainland, Li added, without elaboration.
Zhang Weizhong, general manager of Global Markets from Bank of Communications Co — one of the three banks that arranged the sale, said market response to the bond sales was rather “vigorous” despite the relative low yields.
The yields are lower than Agricultural Development Bank of China’s 3 billion dim sum bond sales in January, which priced a two-year tranche at a 3 percent yield and three-year securities at 3.2 percent yield.
Exim’s offering follows massive yuan bond sales in 2011, which soared to $14 billion last year from $5.4 billion in 2010, Dealogic data suggested.
Premier Wen Jiabao said during a press conference in March that the yuan might have already reached an “equilibrium” level judging by the trading situation in Hong Kong since September. Wen added that the government will allow relatively greater two-way fluctuation in the currency.
Yuan deposits in Hong Kong banks grew nearly tenfold between the start of 2010 and November 2011, according to the Hong Kong Monetary Authority’s data.
However, yuan deposits growth slowed, or even started declining in the second half last year as hopes for larger appreciation started to fade.
HKMA said on Friday that yuan deposits in Hong Kong decreased to 566.2 billion yuan ($89.8 billion) in February, down 1.7 percent from a month earlier.
“Although offshore yuan deposit growth is likely to remain relatively slow in the months ahead, the sizable outflow will not persist, in our view. The trend for further internationalization of the currency is poised to continue, and so should the growth of offshore yuan deposits and other asset classes over the medium term,” said an HSBC report in February.
More yuan bond sales are also well expected, as in January, the National Development and Reform Commission (NDRC) also announced that it has given approval for 10 mainland banks to issue bonds in Hong Kong worth a combined 25 billion yuan ($3.97 billion).
http://www.chinadailyapac.com/article/exims-4b-yuan-bonds-offer-oversubscribed-over-4-times
Hong Kong’s property market is expected to remain stable in the next few years despite pledges by the city’s Chief Executive-Elect Leung Chun-ying to boost home supply when he takes up the top post.
Though Leung proposed during his election campaign to build more low-income housing and boost land supply to meet the demand, these proposals are de facto the continuance of current government policies, said Banny Lam, associate director and economist at CCB International Securities Ltd. He ruled out possibilities that the city’s home prices will tumble in the future.
“In the campaign, Leung promised a healthy development of the city’s property market, and as a property veteran, he wouldn’t favor slumping property prices,” Lam told China Daily.
“Hong Kong’s home prices surged over the years due to an imbalanced supply and demand. Despite the new chief executive’s pledge to boost land and home supplies during his office, the pace is expected to be modest given the construction period as well as public interest,” said Lam.
Housing is the livelihood issue that Hong Kong people are concerned most, which is also the foundation of a stable society, Leung said during the elections.
“Hong Kong is not short of land banks, but lacks long-term planning,” he said.
According to his housing policies, the former property surveyor also vows to increase land supply through various methods including development of new towns, redevelopment of old districts, as well as conversion of vacant sites into residential use.
Together with Leung’s suggestion of resuming the supply of 5,000 apartments per year under the home ownership scheme (HOS), these policies will “paint a picture of sufficient housing supply and reduce the possibility of a housing shortage during his five-year term”, a UOB Kay Hian research report said on Monday.
“The market’s immediate reaction to Leung’s win will be to cap Hong Kong property price,” Allen Wong noted in the report.
As Leung suggested selecting a few new sites suitable for middle-class and the next government might provide the middle class with low interest-rate mortgage for home purchase, these policies may convey a message to buyers that it is better to defer home purchases as there may be more choices at lower prices later, the report added.
However, Eddie Hui, a professor at Department of Building and Real Estate of Polytechnic University does not see the market encountering major transformations despite Leung’s ambitions in providing people with better living conditions.
“An enhanced effort in building public housing and residential homes brought very positive signals to the market but there are also more obstacles awaiting the new chief executive to tackle.”
“Leung also proposed to only sell homes to Hong Kong residents when the market becomes over-heated, but without any precedent, the promise still lacks consensus particularly to carry out in an international metropolis like Hong Kong,” said Hui.
A Citigroup report published on Monday indicated that the bank maintained its view that general property prices will not fall substantially on the simple theme of Leung taking office. “His detailed proposed land and housing policies do not differ significantly from what the current administration is pursuing,” wrote Adrienne Lui, an analyst from the bank.
Patrick Chow, Ricacorp Properties head of research, believes the city’s residential market in the long-run is still on an upward trend as property is still one of the most favorable tools to hedge against inflation.
http://www.chinadailyapac.com/article/hong-kongs-property-market-remain-stable