Friday 26th November 2010

Dear Reader,

NEW ARTICLE
Government criticises Stamp Duty proposal
In a case of policy schizophrenia, the Government said a special stamp duty would be unfair, cause additional hardship to those in financial difficulties, and amount to double taxation. Then they proposed it anyway, based on a bunch of selective, deceptive and alarmist statistics, which we dissect. Legislators should kill this proposal or at least insert a sunset clause so that it expires with Donald Tsang's office. Exceptional times do not call for irrational measures. (26-Nov-2010)

RECENT ARTICLES
GOME chairman admits: we lied - UPDATED
Electrical retailer GOME, having reached a truce with jailed founder and controlling shareholder Wong Kwong Yu, now puts itself back in the spotlight by Chairman Chen Xiao's confession that it lied to investors in Dec-2008 about the state of affairs of the group. That's a criminal offence. We call on the SFC to investigate. UPDATE: GOME has published a response, which we include with comments. (22-Nov-2010)

Mucking Out the Jockey Club
We look at the structural incentive for corruption in membership admission to HKJC, and its small-circle voting system, highlighted by yesterday's arrest of 3 of the 200 Voting Members. If private clubs wish to avoid the reputational risk of corruption, then they should adopt tender-based admission systems to remove the incentive and capture full value for their members. (18-Nov-2010)

Pass it on!
This free newsletter goes to over 20,000 practitioners, issuers, regulators and investors in Hong Kong's markets. If you enjoy it, then please invite a friend to find out what they are missing and subscribe!

Visit our archives, and do your homework before you invest.