Hong Kong’s mass vaccination program launches this week, but social-distancing rules are expected to remain for a while. The city’s Financial Secretary delivered an optimistic outlook for economic recovery, forecasting growth of 3.5% to 5.5% for the calendar year. While Hong Kong and Singapore resume discussion on the delayed travel bubble, Malaysia Airlines is working with local authorities to implement a “health passport”.
MAJOR HEADLINES IN ASIA
This section tracks major political, economic and business news from the key economies in Asia.
Central banks from China, Thailand, the United Arab Emirates and Hong Kong are exploring a digital currency cross-border payment project together. The project will explore ways using distributed ledger technology to facilitate real-time cross-border foreign exchange payment-versus-payment transactions. The central banks will also explore business use cases in a cross-border context using both domestic and foreign currencies.
The Hong Kong and Singapore Governments are confirmed to be in early talks to resume the postponed travel bubble, which was set for November last year but derailed following a fresh Covid-19 outbreak in Hong Kong.
Malaysia Airlines is developing a Digital Travel Health Pass that enables a contactless journey with travel documents stored securely on the platform. With the health pass, travellers will be able to make appointments for Covid-19 tests, store vaccination records, and be informed of travel policies worldwide. The Airline’s parent company has confirmed that talks are underway with the local authorities regarding its implementation.
South Korea’s trade minister said on Thursday that the government is poised to cooperate with Eastern European countries on green business, including the development of low carbon energy. Korean companies will receive government support to carry out R&D activities on hydrogen technologies and advance into foreign countries.
Australia’s parliament passed landmark legislation on Thursday requiring global digital giants to pay for local news content. The government said the law, called the News Media and Digital Platforms Mandatory Bargaining Code, would ensure that news businesses “are fairly remunerated for the content they generate, helping to sustain public interest journalism in Australia”.
EQUITY AND DEBT CAPITAL MARKETS
This section highlights the biggest ECM and DCM developments in China and Hong Kong which are moving markets and grabbing headlines.
Green bonds are emerging as a major theme in China’s bond market as the country accelerates efforts to achieve carbon neutrality by 2060. The first batch of “carbon neutrality” bonds amounting to a combined US$991.57 million was recently issued by China Southern Power Grid, China Three Gorges Corporation, SPIC, Huaneng Power International, Sichuan Province Airport Group, and Yalong River Hydropower Development Company.
China’s top crude oil importer Sinochem Energy is ready to launch an IPO in Shanghai Stock Exchange, aiming to raise US$1.7 billion in proceeds.
In Hong Kong’s latest budget, the Government proposed doubling the borrowing ceiling of its green bond programme to HK$200 billion to allow it to issue a further HK$175.5 billion of the environmentally friendly bonds within the next five years.
WeDoctor is planning to file for an IPO in Hong Kong as soon as next month after fetching a valuation of US$6.8 billion in its latest funding round. The Tencent-backed company raised about US$400 million in a pre-IPO round from investors including Sequoia and Millennium Management LLC late last year.
PE/VC DEAL ACTIVITY
This section tracks the fundraising, deals and other activities conducted by the PE/VC funds in Asia.
CHINA AND HONG KONG
Shanghai-based VC firm Fresh Capital has reached a first close of US$93 million on its second renminbi-denominated fund. LPs include local government guidance funds, funds-of-funds, corporates, and family offices.
Chengdu-based Clover Biopharmaceuticals has raised US$230 million in Series C funding led by GL Ventures and Temasek Holdings. Oceanpine Capital, OrbiMed, and Delos Capital all re-upped.
AnchorDx, a China-based medical technology developer focused on DNA sequencing and diagnostics has raised a US$40 million Series C round led by OrbiMed and WuXi Huiying Investment.
ANE Logistics, one of China’s top three less-than-truckload logistics players, has raised US$300 million in funding led by CPE. Greater Bay Area Fund, Hong Kong-listed NWS Holdings, Liumai Capital, and Huagai Capital also took part.
JAPAN AND KOREA
KKR has made a pre-IPO investment of US$723 million in Hyundai Global Service, the aftersales marine services arm of Korean shipbuilder Hyundai Heavy Industries Holdings. The PE firm has agreed to take a 38% stake at a valuation of approximately US$1.78 billion.
PS Alliance, an investment unit of South Korean automotive and electronic components manufacturer Poongsung Group, has led a US$276 million commitment to local e-commerce platform Tmon.
Singapore-based investment fund Motion Ventures is looking to raise as much as US$22.7 million for its debut fund, which will provide strategic capital and support to start-ups facing maritime value chain hurdles. The fund has already made its first close but the amount has not been disclosed.
Singapore-based VC firm Jungle Ventures has topped up its investment in Saltmine, the San Francisco-based digital workplace design platform that raised US$20 million in Series A funding. Jungle Ventures participated in the latest funding round along with JLL Spark, the strategic investment arm of commercial real estate services firm JLL, and existing investor Xplorer Capital.
This section highlights the major regulations, policy changes and political developments in China and Hong Kong that have implications for the business environment.
China's first special regulation on the use, management and supervision of China's medical insurance funds will take effect on 1 May. The full text was released to public this week which mandates institutions and pharmacies that engage in fraud to be fined two to five times the amount of money involved, and their licenses to practice will be suspended or revoked.
The Hong Kong Government released a paper on Monday to outline a waste reduction program in which consumers will get a refund of 10 HK cents for every plastic bottle returned, while a levy of up to 65 cents will be imposed on drink suppliers for each such container. A licensing system will also be in place to regulate recyclers and ensure the bottles returned are properly treated.
ONE FOR THE WEEKEND
Each week we will select one or two articles which have caught our attention – long reads, institutional outlooks, analysis or interesting viewpoints
The Hong Kong budget was announced this week, in which the first hike in stamp duty since 1993 was announced to the consternation of traders and retail investors. The exchange saw its share plunge immediately after, and some commentators worry about the uncertain future of the exchange, amid intensifying competition from China. Despite this, trading volumes soared over the past year, and in 2020 is hosted four times the volume of the LSE. The HKEx recently announced its first non-local CEO, Nicholas Aguzin recently, who will inherit a strong pipeline of IPOs slated for 2021 but will have to steer the HKEx carefully in the coming years.
THE WEEK AHEAD
China’s top government officials from all over the country will gather in Beijing for the annual Chinese People’s Political Consultative Conference and the National People’s Congress sessions, in which the legislative body will set out economic targets and policies for 2021. Analysts predict that advanced technologies and independence of supply chains would be China’s priority for the first year of the 14th Five Year Plan.
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