Rotary Club of Hong Kong South Meeting Report

resident Gary welcomed us to our regular luncheon meeting at our sunny Bayview room of HK Country Club. I am sorry that I was late and without the camera. The view was great. Wish the missing members were here.

Things that need your attention:

Sept. 15th: Directors' meeting at President Gary's office. 6:30PM coffee is great.

Sept. 18th: Rotary Foundation seminar PDG Tam guarantees a tight schedule of 9AM to 3PM. Three of us have signed up. It's great for new members to know about the money movement in Rotary.

Sept. 23rd: DG Visit at our lunch meeting. Full attendance is much appreciated. I will stop typing for 3 minutes for you to write down the above events in your appointment book.

Rtn. Simon noted that a notice did pull up our August attendance by about 2%.

PP Tom introduced 2 visiting Rotarians:

Rtn. Y.P. Reddy from Rotary Club of Lautoka, FIJI.

Rtn. Andrew Ma from Rotary Club of HK Island West.

Our flag was given to FIJI.

Sergeant-at-Arms Rtn. Simon received contributions of $690 and raffle $360 temporary totaling 1050. President Gary reminded us that our last week and this week collections will past to our district Turkey Disaster Relief Fund. After another round of begging and IPP Nick promoting our raffle, we have received another $650. This week total is $1,700, and 2 weeks total $5,420.

Birthday Boy PP Rex paid not to sing and receive his non-alcoholic gift.

Our Speaker Jake Van Der Kamp

Our speaker started working in South China Morning Post - Business Post (SCMP) when he first came to HK. Then he changed from being a critic to a player - an investment banker in SHK [an ex-colleague of our president], Morgan Stanley, and a few other companies. Currently, he is SCMP - Business Post. Please don't compare this writing to our speaker.

After his brief introduction, he used the famous Milton Freeman currency triangle. This triangle contains 3 components:

1. Currency exchange rate,

Interest rate, and

Freedom of Capital flow.

Freeman's theory is that a government can only control one of the three to maintain free market. Once a government controls 2 of the 3 components, the economy is limited and prone to external market turnmoils. Our speaker stated that HK controls only the exchange. The other 2 components are relatively free when compared with Malaysia, Thailand, Indonesia, and etc. Most HK businesses, possibly the government, have been very focus on return on investment (ROI). Such situation allows our market's interest rate and capital flow to move freely with external impacts.

Why HK's GDP is relatively low when compared with other Asia countries ? Our speaker suggested that Malaysia, Korea, and Indonesia have "cheated" or have used temporay fixes. In light of Korea's larger GDP growth than HK, our speaker asked "How can Korean stock market is at all time high when the No. 3 listed company with US$60 billion debt while having repayment problems ?"

Furthermore, our speaker noted that HK's slow growth is due to our actual market correction. Our retail price especially clothing dropped some 40%, real estate and wages were also falling gradually. Such correction process takes time but it will provide HK better staying power. Additionally, our interest rate is more "in-line" with the market value.

Q & A:

Our speaker was asked about his view on government stock market intervention. He pointed out that our government intervention is still relatively small : 6% of total equity market virus 40% in Singapore companies having government control. In our speaker's view, our finance minister Donald Tsang intervention was mainly to stop the manipulations of market by US fund managers who was treating HK stock market and indexes as their "personal ATM."

Mr. Van Der Kamp thought that our real estate were out of lines. After real estate collection and fair legal system, HK could become attractive again.

According to AC Nelsien, 50% of interviewed HK people have no mortgage obligations.

However, many of our audience disagreed with our speaker that our real estate price currently are fair when compare globally. Will we see a reply in SCMP on Sept. 3rd ? This is interactive meeting.

Rtn. Marion thanked our speaker in her gracious manner. After our 2 raffle draws, our President Gary led us to toast to RI and Rotary Club in FIJI.