Hong Kong’s construction and tech firms are set to get a boost as the government aims to speed up the development of the Northern Metropolis project.
The city is accelerating work on a cross-border tech hub that spans 300 square kilometres, Chief Executive John Lee said in his annual speech on Sept 17. This will provide a prospective growth driver for a fragile economy.
Plans to attract more high value-added industries including advanced manufacturing and pharmaceutical companies will also help prospects for Hong Kong. That may give the city’s equities a further lift.
The benchmark Hang Seng Index rose as much as 1.8% on Sept 17, taking year-to-date gains to 34%. Here’s a look at the stakeholders that may benefit or lose out from the plans unveiled through the policy speech:
Winners
* Real estate developers: Accelerated works on the Northern Metropolis, designed to house 2.5 million residents, would benefit builders including Henderson Land Development., CK Asset Holdings and Sun Hung Kai Properties
* Companies related to infrastructure, transportation, and maintenance services may also see a surge in new contracts as the tech hub expands, according to Kenny Ng, strategist at China Everbright Securities International. That would help firms such as China State Construction International Holdings, Transport International Holdings and Baguio Green Group
* Technology enterprises: The government’s plan to promote the use of artificial intelligence would benefit companies that develop relevant solutions or those that adopt AI applications. An allocation of HK$1 billion ($164million) has been earmarked for the establishment of a research and development institute in 2026
* Schools and students: The government is planning to hike non-local student quota at universities to 50% and add more international schools to boost admission
* Exchange operator Hong Kong Exchanges and Clearing may get a boost from measures on capital markets including promoting T+1 stock trading
Losers
* Existing property investors: While builders may gain from various development projects, owners of existing residential properties may face pressure as the government shifts its focus to non-residential investment schemes and eases rules for new entrants
* Licensed taxis: Plans to expand autonomous vehicle trials may put traditional taxi operators under mounting pressure and increase potential market share loss. The government also aims to regulate ride-hailing services
* Civil servants: Lee’s emphasis on government efficiency and on the use of AI may impact government workers, particularly following on from Financial Secretary Paul Chan’s remarks on cutting 10,000 positions from the civil service by 2028
