Hong Kong Bonuses Jump 25%

It was a good year for bonuses in Hong Kong.
More than half of Hong Kong finance professionals received a larger bonus in 2010 than 2009, and the average bonus was 25% larger—nearly double the 13% average increases in Singapore and Australia, according to a survey by eFinancalCareers. In the U.S., bonuses were down 5%.
Still, the survey found a third of Hong Kong finance professional were dissatisfied with the amount, and 45% are looking to change firms. (Another 13% are looking for new positions within their existing companies.)
“Widespread bonus dissatisfaction amongst Hong Kong professionals will likely fuel post-bonus turnover across the city’s finance industry,” said George McFerran, head of Asia Pacific for eFinancalCareers, a London-based job recruitment site. There’s major hiring across all business sectors within finance in the region, he said.
The big bonus winners in Hong Kong were on the sell side, where bonuses on average were 48% larger than on the buy side, and in the front office, where bonuses were five times those in middle or back offices.
The survey polled 6,364 finance professionals, including 1,016 in Hong Kong, with the rest in the U.S., UK, Australia and Singapore.

By Cathy Yan

China Mobile Drops to 23-Month Low on Unexpected Spending

China Mobile Ltd. (941), the world’s biggest wireless carrier by users, fell to the lowest in 23 months in Hong Kong trading after the company unexpectedly said it will boost capital spending 6.5 percent this year.

China Mobile fell 2.7 percent to HK$69.15 at 10:12 a.m. local time. Earlier the shares fell as much as 3.6 percent to HK$68.50, the lowest intraday price since April 30, 2009.

China Mobile said yesterday it would boost capital spending on its networks to 132.4 billion yuan ($20.1 billion) this year, from 124.3 billion yuan in 2010, to expand its ability to deliver data to mobile Web users downloading music, video and games on their phones. China Mobile had been expected to reduce spending from the high levels of the past two years, when it was setting up its third-generation network, according to analysts including Colin McCallum from Credit Suisse Group AG.

“In a major change, China Mobile guided for capex to increase,” Hong Kong-based McCallum wrote in a report yesterday after the earnings were released. “Management therefore appears keen to use China Mobile’s balance-sheet power to invest aggressively and maintain its service and network quality advantages, in order to protect its dominant position amongst medium and high-end customers in advance of the rollout of 4G.”

Other analysts, including Michael Meng of BOCI Research Ltd., had also expected the Beijing-based company to cut spending from last year’s level. Meng had forecast capital spending at China Mobile would drop to 118 billion yuan this year in a March 9 report. Paul Wuh, a Hong Kong-based analyst at Samsung Securities Co., said yesterday he’d expected the 2011 expenditure at 98 billion yuan.
Spending Guidance

The capital spending guidance “was a negative coming out of the result,” Lisa Soh, a Hong Kong-based analyst at Macquarie Group Ltd., which rates the stock “outperform”, said in an e-mail yesterday.

Soh said she was surprised by the company’s projection, which was 35 percent more than the 98 billion yuan she estimated.

“To expand our leading position and further develop high value-added services, we will increase our capital spending this year,” China Mobile Chairman Wang Jianzhou said at a press conference in Hong Kong yesterday. “The value-added data business will be a significant source of future revenue growth for our company.”

Capital spending will remain above last year’s level in each of the next two years, Wang said. He projected spending of 130.4 billion yuan next year, and 125.5 billion yuan in 2013.
Data Boost

Data services helped boost net income 3.7 percent to 32.4 billion yuan in the fourth quarter ended Dec. 31, according to figures derived from full-year earnings reported by the company yesterday. Profit was expected to be 31.8 billion yuan, according to the average of five analyst estimates compiled by Bloomberg News. Fourth-quarter sales rose 6 percent to 132.6 billion yuan.

China Mobile had a total of 584 million mobile-phone subscribers at the end of last year, including 20.7 million customers for the high-speed, third-generation service that smartphones use to surf the Web, the company said in February.

That compares with China Unicom’s 311.3 million total subscribers and 14.1 million users of its 3G service. China Telecom was in third place with 90.5 million subscribers.

China Mobile has 35 million registered customers for its mobile applications offerings, who can select from 50,000 applications to download, the carrier said. By the end of last year, the site had recorded 110 million application downloads, according to a company statement.
4G Trial

Wang aims to keep China Mobile’s lead with heavy-data users by rolling out the country’s first fourth-generation network. The company in December received approval from the Ministry of Industry and Information Technology to begin a trial of its 4G TD-LTE network, and this month it added Beijing to the original six cities in the program: Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen.

The trials will primarily be focused on high-speed data cards for notebook computers and won’t promote many new handsets for the system, Chief Executive Officer Li Yue said yesterday.

The trials will include network equipment from both Chinese and foreign suppliers, Li said. Chinese suppliers may include Huawei Technologies Co. and ZTE Corp. (763) while overseas companies may include Ericsson AB, Nokia Siemens Networks and Alcatel- Lucent SA, he said.

To contact the Bloomberg News staff on this story: Edmond Lococo in Beijing at elococo@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

HSBC says keeps main CEO office in Hong Kong

LONDON/HONG KONG, Jan 25 (Reuters) - HSBC's (HSBA.L) new chief executive's main office will remain in Hong Kong after the symbolic shift of the CEO office there last year, Europe's biggest bank said on Tuesday. Stuart Gulliver, who became CEO in January, will retain an office in London and is expected to spend much of his time at HSBC's London headquarters. However the bank said a report he had dropped plans to be based in Asia was "entirely incorrect".
"The group CEO's principal office remains in Hong Kong, there's no change in that," said Richard Beck, spokesman for the bank.
Gulliver was named CEO in September after a shock boardroom upheaval prompted by a change in chairman, and said at that time he would be based in Hong Kong.
Previous CEO Michael Geoghegan announced he was moving to Hong Kong with much fanfare a year ago. On his first official day as CEO entering the stylish Norman Foster-designed HSBC building in the territory's Central district he was greeted by dozens of applauding employees.
The moment was rich in symbolism, showing the 146-year-old bank was returning to its roots, where it was originally known as the Hongkong and Shanghai Banking Corp Ltd.
HSBC aims to be the first firm listed on Shanghai's international board, and the CEO's move to Hong Kong and Gulliver's close ties to China are expected to help that happen this year.
Gulliver, who ran the investment bank arm from London before his promotion to CEO, joined HSBC in 1980 and has permanent Hong Kong residency after spending most of his career there.
The bank said Gulliver will spend as much time in Hong Kong as anywhere else in the world and will move back into the HSBC house he previously occupied in Hong Kong, rather than the house occupied by Geoghegan.
He is expected to spend much of his time in London, and as a result continue to pay UK income tax.
Tuesday's Financial Times said Gulliver had dropped plans to relocate to Hong Kong.

Analysts said the location of the CEO's office was symbolic, but had little bearing on a strategy that is increasingly focused on fast-growing Asian markets.
Ian Gordon, analyst at Exane BNP Paribas, said HSBC was showing a "new found appetite to accelerate loan growth" in Hong Kong and Asia and Geoghegan's move had been accompanied by a "bizarre wave of enthusiasm".
By 1230 GMT HSBC shares were up 0.3 percent at 699 pence.
(Additional reporting by Karolina Tagaris; Editing by Ken Wills and Sophie Walker) ((kelvin.soh@thomsonreuters.com; +852 2843 6345; Reuters Messaging: kelvin.soh.reuters.com@reuters.net))
By Steve Slater and Kelvin Soh

Japan's Baroque Seeks Hong Kong Listing

HONG KONG—Japanese clothing retailer Baroque Japan Ltd., which sells the "moussy" women' brand, is seeking to raise up to US$300 million in an initial public offering in Hong Kong in the second quarter, two people familiar with the situation said Friday, as it moves to tap China's booming consumer market. A listing in Hong Kong would also build up Baroque's profile, especially China, a person familiar with the situation said.
Tokyo-based Baroque, in which CLSA Capital Partners owns a stake, operates 175 company stores, most of which are in Japan. Outside Japan, Baroque had 24 franchise stores mainly in China, Hong Kong and Taiwan at the end of July 2010, the person said, adding that the group planned to expand its retail network in China.
Baroque joins a slew of Japanese companies that are expanding overseas to find growth amid a sluggish domestic economy and an ageing population. Among retailers, Fast Retailing Co., operator of the Uniqlo casual-clothing chain, has been expanding its stores in Asia as its domestic business generates lower revenue. The country's big-three banks—Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc.—have all been ramping up their presence beyond their borders.
Baroque Japan is only the second Japanese company with plans to tap Hong Kong's booming IPO market, the busiest exchange for new share issues last year. SBI Holdings Inc. plans to raise between US$300 million and US$500 million by offering shares in its financial unit in both Hong Kong and Japan in the first quarter, at the earliest, people familiar with the situation said Wednesday.
Last year, Hong Kong led the global IPO pack with $52.9 billion in new stock offerings, while New York, at No. 2, raised $34.6 billion. Three non-Chinese companies were among the Asian city's top 10 IPOs.
They were aluminum giant UC Rusal Ltd., whose US$2.2 billion January float was the first by a Russian company in the city; skincare chain L'Occitane International SA, whose US$787 million IPO was the first by a French firm in Hong Kong; and coking-coal producer Mongolian Mining Corp., which raised US$749 million and became the first Mongolia-based company to list in Hong Kong.
UBS AG and CLSA Asia-Pacific Markets are handling Baroque's listing plan, the people said.
Write to Prudence Ho at prudence.ho@dowjones.com and Yvonne Lee at yvonne.lee@wsj.com

By PRUDENCE HO And YVONNE LEE 

Hong Kong Disneyland Loss Narrows to $93 Million as Park Attendance Climbs

Walt Disney Co. narrowed the annual loss at Hong Kong Disneyland and said it expects the business to turn profitable “fairly soon” as visitor numbers rise and the park expands.
The net loss shrank to HK$720 million ($93 million) in the 12 months ended Oct. 2 from a HK$1.3 billion loss a year earlier, according to a statement distributed in Hong Kong today. Park attendance increased 13 percent to 5.2 million visitors, boosting sales 19 percent to HK$3 billion.
The theme park benefited from a 27 percent surge in arrivals from mainland China in Hong Kong last year as wealth generated in the world’s fastest-growing major economy spurred outbound tourism. New areas of the park scheduled to be completed in 2014 may lure more visitors.
“We hope they can accelerate the expansion and add more rides,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council.
The park, a venture between Hong Kong’s government and the Burbank, California-based company, plans to add rides including “Toy Story Land,” “Grizzly Trail” and “Mystic Point” after the city approved the conversion of part of its loan to the park into equity in 2009 and Disney agreed to pay HK$3.5 billion.
“The expansion is very crucial to our profits in the future,” Hong Kong Disneyland managing director Andrew Kam told reporters today.
China Visitors
Hong Kong’s government owns about 53 percent of the theme park. Disney, the world’s largest media company, owns the rest.
The expansion plan is on time and on budget as the park signed most of the outsourcing contacts in 2009 that allow it to avoid a rise in raw-material costs, Kam said. “Toy Story Land” will be completed this year, he said.
The share of Hong Kong Disneyland visitors coming from mainland China rose to 42 percent from 36 percent, while Hong Kong’s contribution declined to 33 percent from 41 percent.
The park had earnings before interest, taxes, depreciation and amortization of HK$221 million. Hotel occupancy increased 12 percentage points to 82 percent.
Ticketing generates the most profit, Kam said, followed by merchandising, food and beverage and hotel businesses. He said 98 percent of the theme park's 5.2 million visitors last year paid for their tickets.
Total visitor arrivals to the former British colony surged 22 percent to 36 million in 2010, according to the government- backed Hong Kong Tourism Board. China’s National Tourism Administration said outbound tourism increased 17.5 percent last year to 56 million people, Xinhua News Agency reported Jan. 12.
Hong Kong Disneyland expects attendance to grow 10 percent in 2011, in line with a forecast from the city’s Tourism Board, Kam said.
To contact the reporter on this story: Wendy Leung in Hong Kong at wleung12@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net

Hong Kong to Protect Bank Deposits of Up to HK$500,000

Hong Kong will protect bank deposits of up to HK$500,000 ($64,000) per depositor after full coverage introduced during the financial crisis expires tomorrow.

The new program, called the Enhanced Deposit Protection Scheme, will be effective Jan. 1, the Hong Kong Monetary Authority said in a statement on its website. Hong Kong began fully insuring bank deposits on Oct. 14, 2008, shortly after the collapse of investment bank Lehman Brothers prompted regulators around the world to boost protections to calm investors.

“The Full Deposit Guarantee has functioned effectively to shore up public confidence in Hong Kong’s banking system during the global financial crisis,” Hong Kong Financial Secretary John Tsang said in a statement. “As the global economy has become more stable, the provision of this special guarantee by the government should come to an end as originally planned.”

HKMA Chief Executive Norman Chan said Hong Kong’s banking system remains “healthy and robust,” with capitalization well above international standards.

“Public confidence in the banking system has also remained strong,” Chan said. “The expiry of the Full Deposit Guarantee is not expected to have any impact on the banking system.”

Editors: Dirk Beveridge, Ben Richardson.

To contact the editor responsible for this story: Marco Lui at mlui11@bloomberg.net

Hong Kong stocks seen easing as commodities retreat

Hong Kong stocks are set for a weak open on Wednesday after five successive gaining sessions as
commodity-related stocks pull back with investors taking some
money off the table.

The benchmark Hang Seng Index .HSI rose 1 percent on
Tuesday, helped by a strong start to the year for mainland
markets and as cyclical counters such as shippers rose on
optimism toward the global economic recovery.

Stocks on Wall Street edged lower as investors shed long
positions in the red-hot resource sector after recent gains as
copper, oil and other commodities slipped from multi-year highs.

Oil majors PetroChina (0857.HK) and CNOOC (0883.HK) closed
lower on Tuesday in Hong Kong as light profit-taking in the
latter half of the day pulled their shares lower.

Easing oil prices, expectations of a stronger yuan and a
rebound in Chinese air travel is likely to lift shares of
mainland airline operators.

China Eastern Airlines (0670.HK), the country's third most
valuable airline, expects 2010 net profit to be ten-fold that of
2009 due to brisk air travel in China. [ID:nTOE70306I]

However, news of the opening of the $33 billion high-speed
rail link between Beijing and Shanghai in June that cuts the
journey between the two cities in half to less than five hours is
seen as negative to mainland airlines and could hurt profits.

Elsewhere in Asia, Japan's Nikkei .N225 was down 0.1
percent while South Korea's KOSPI .KS11 was trading flat as of
0105 GMT.

STOCKS TO WATCH:

 * Chinese car maker BYD Co Ltd (1211.HK), backed by U.S.
billionaire Warren Buffett, said on Tuesday that it sold a total
of 519,806 vehicles in 2010, falling short of a revised target of
600,000 units. [ID:nHKV002612]

 * China will open its $33 billion high-speed rail link
between Beijing and Shanghai in June, cutting the journey between
the two cities in half to less than five hours. The new line is
expected to provide a serious challenge to airlines including Air
China Ltd (601111.SS)(0753.HK), China Eastern Airlines Corp Ltd
(600115.SS) and China Southern Airlines Co Ltd (600029.SS)
1055.HK>. [ID:nTOE70304Y]

 * Two executives from China Gas Holdings Ltd (0384.HK), a
natural gas distributor, have been detained for investigation by
China's police, the company said on Tuesday. [ID:nTOE703064]

 * PetroChina (0857.HK) has put into operation a 1.8 million
tonne per year (tpy) gasoline hydrotreating unit at its Lanzhou
refinery, an industry source said on Tuesday. [ID:nTOE703068]

 * The United Laboratories International Holdings Ltd
(3933.HK) said the China State Food and Drug Administration had
approved applications of its three insulin finished products,
bringing the total number of insulin products approved to five.
The relevant insulin products will be launched to the market
soon. For statement click
here

 * China Vanke Co Ltd (000002.SZ) said on Tuesday its sales
for 2010 rose 70.5 percent to 108.2 billion yuan ($16.4 billion),
despite a slowdown for the final month of the year.
[ID:nTOE70306D]

 * China's XZ Construction (000425.SZ), a maker of
construction machinery, plans to float its shares in Hong Kong,
the company said in a filing with the Shenzhen Stock Exchange on
Wednesday. [ID:nTOE70306X]
 MARKET SUMMARY
*Wall Street edges lower on commodity shares        [nN04241972]
*Treasuries losses may stall, trade in range        [nN04231899]
*Dollar buoyed by US data, lower oil prices         [nN04234864]
*Oil slides 2 percent as commodities slump          [nL3E7C407O]
 (Reporting by Vikram S Subhedar, Editing by Jacqueline Wong)