Dear readers,
Hong Kong’s most glorious season is the winter, as every resident will point out to newcomers within minutes. All of the territory’s favourite pastimes are more agreeable when the temperature is not sweltering and the humidity bearable. These include hiking in Hong Kong’s hills and parks, as well as excessive drinking in Lan Kwai Fong. In May the sky turns murkier with low-hanging rain clouds that often envelope Victoria Peak. Temperatures are already nearing 30C, reminding denizens that the sweaty summer months are more pleasantly spent elsewhere.
Apart from the weather, a degree of murkiness has always been part of Hong Kong’s attraction. Western fugitives, such as Edward Snowden and “Mr Nice” Howard Marks have passed through or settled in the former British colony. Wealthy Chinese citizens stash their cash in the city in hope of avoiding the reach of the Communist party. And Hong Kong shell companies are being used to quietly amass foreign investments. The case of HNA’s stake in Deutsche Bank serves to remind us that equity collars, a derivative structure frequently used in stake buying, are merely a way to obtain voting rights on the cheap, while limiting the buyer’s exposure to share price gains and losses.