HKMA sees threat to world economy

The world economy is facing the "threat of profound and traumatic disruption," said Norman Chan, chief executive of the Hong Kong Monetary Authority.

"The breakdown of monetary, fiscal and market disciplines has contributed to the deepness and severity of the latest crisis in the advanced economies," Chan said in a speech posted Thursday on the HKMA's website.

Liaoning promotes hot spring tours

The northeastern province of Liaoning expects to develop its tourism industry by attracting Hong Kong tourists with hot spring-themed travel itineraries, according to a promotional conference hosted by the province's officials in the city on Thursday.

Five Hong Kong travel agencies, including Hong Thai Travel Services, Hong Kong Kien Hwa International Travel and China Travel Service (Hong Kong), signed cooperation agreements with five counterparts from Liaoning. The travel agencies will market hot spring-themed trips to Liaoning.

Wu Hongjian, director general of Liaoning Tourism Bureau, said that hot springs in winter will present a different experience to Hong Kong tourists. Meanwhile, Liaoning will package other activities into the hot spring trip, such as skiing, dining and historical sight-seeing.

PetroChina faces refining losses

PetroChina said on Thursday its refining losses may hit $7.8 billion this year if fuel prices stay at current level for the rest of 2011, and it will also be burdened by higher taxes.

China's refiners have struggled as a result of a government pricing system that prevents them from fully passing on their costs to consumers.

Despite the government caps on refined products, however, PetroChina's profits from its dominant upstream oil production business have outweighed losses in the refining business. In the first half of this year, it reported 66 billion yuan ($10.3 billion) in overall net profit.

Stocks drop amid debt-talks impasse

Hong Kong stocks fell on Thursday, deepening a weekly retreat, amid concern an impasse over European bailout talks may hurt a global recovery, while the US Federal Reserve said companies grew more pessimistic about the US economy.

The Hang Seng Index (HSI) fell 1.78 percent to 17983.10 as of the close. The Hang Seng China Enterprises Index dropped 3.8 percent to 9094.54 on Thursday.

Stocks across the Asia-Pacific region fell after Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated that an impromptu meeting of European leaders in Frankfurt Wednesday night failed to resolve differences ahead of a summit scheduled for this weekend.

Esprit slipped 9.3 percent to HK$10.30, leading exporters lower. Li & Fung lost 3.2 percent to HK$12.54. Commodity shares in the Hang Seng also slid after New York-traded crude oil futures lost 2.5 percent on Wednesday, while copper futures for December delivery dropped 3 percent.

Jiangxi Copper fell 5.3 percent to HK$14.76, while Aluminum Corp slumped 6.5 to HK$3.46. Cnooc Ltd declined 4.9 percent to HK$12.54.

Futures on the Standard & Poor's 500 Index lost 0.3 percent on Thursday. The S&P 500 fell 1.3 percent on Wednesday.

Futures on the HSI fell 2.7 percent to 17799. The HSI Volatility Index climbed 8 percent to 38.64.

ICBC dipped 2.2 percent to HK$4.03, leading mainland financial stocks lower after the nation's banking regulator said risks stemming from a so-called shadow banking system and private lending must be "strictly controlled".

Bloomberg - Reuters

(HK Edition 10/21/2011 page2)