Thu, Mar 28, 2019 - Page 10 News List

World Business Quick Take

AGENCIES

PROPERTY

HK plans vacancy tax

Hong Kong’s government unveiled details of a planned tax on unsold new apartments, including potential jail time for developers who defy the rules. Developers would be required to submit reports annually on the status of apartments, with false statements punishable by a fine and a year in prison, a document submitted to the Legislative Council late on Tuesday proposed. Under the plan, a tax amounting to double an apartment’s annual rental value would apply after six months of vacancy. The proposal also plugs a loophole: Developers cannot beat the tax simply by selling a new apartment to an associated company. The government plans to introduce a bill containing the measures before the end of the legislative year in July.

PROPERTY

Evergrande faces fund gap

Hui Ka Yan (許家印), China’s second-richest man, has 17 billion reasons to keep him awake at night. His property developer, China Evergrande Group (恒大集團), has debt maturing in 12 months or less that exceeds its cash by 114 billion yuan (US$17 billion), its full-year report released late on Tuesday showed. The yawning gap is partly the result of a drop in its cash buffer in the second half of last year. The giant funding gap indicates that Hui’s efforts to whittle down a US$100 billion debt pile and put the firm on a more solid financial footing still have some way to go. It might also explain why the company was willing to pay yields as high as 13.75 percent on bonds it sold in October last year — an issue Hui personally invested US$1 billion in.

INTERNET

Line, Mercari join forces

Line Corp and Mercari Inc are joining forces on mobile payments as Japan’s Internet companies race to dominate cashless transactions in the world’s third-largest economy. The operator of Japan’s most popular messaging platform and the used-goods online marketplace app would let users shop and pay for purchases at stores that accept each other’s systems, they told reporters in Tokyo yesterday. They also launched an alliance to welcome other mobile payment providers.

AIRPORTS

Group buying GMR stake

A consortium including India’s Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management, is to invest 80 billion rupees (US$1.2 billion) to buy a stake in GMR Airports Ltd. The deal would pump 10 billion rupees into GMR Airports, a unit of GMR Infrastructure Ltd and purchase 70 billion rupees of the airport unit’s equity shares from the parent, according to a statement. GMR operates Delhi International Airport Ltd, the nation’s biggest airport. The deal values GMR Airports at 180 billion rupees, the company said in a filing. After the purchase, Tata would hold 20 percent in the airport unit, while GIC would get 15 percent and SSG would own 10 percent.

MACROECONOMICS

Downside risks remain: ECB

European Central Bank (ECB) President Mario Draghi said that risks to the eurozone’s economic outlook remain tilted to the downside and a pickup in inflation is delayed, warranting a continued accommodative monetary policy that includes negative interest rates. “If necessary, we need to reflect on possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects, if any,” Draghi said. “That said, low bank profitability is not an inevitable consequence of negative rates.”

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