Finance
Issuing bonds to tackle Hong Kong deficit not ‘monstrous’: ex-minister Henry Tang
Hong Kong’s plan to issue bonds to tackle a dire deficit is not “monstrous” but rather a legitimate short- to medium-term solution to improve capital flow, former finance minister Henry Tang Ying-yen has said.
Tang on Tuesday defended the government’s plan, which Financial Secretary Paul Chan Mo-po announced in his budget blueprint, after his successor, John Tsang Chun-wah, warned the measure could affect the city’s credit ratings.
According to Chan’s budget speech last week, Hong Kong planned to issue HK$120 billion (US$15.3 billion) in silver, green and infrastructure bonds to cover the government’s recurring expenses. He remained confident that the city would balance the books within three years.
Tsang, the longest-serving financial secretary from 2007 to 2017, earlier said in a social media post that the city needed to look beyond bond issuances to cover government spending. He also argued the government had “undeniably fallen into an era of structural deficit”.
Speaking in Beijing as a member of the Standing Committee of the Chinese People’s Political Consultative Conference (CPPCC), Tang, who was the financial secretary before Tsang, called the plan “completely legitimate” as long as there was market demand.
“Bond issuance for the purpose of maintaining government operations is not monstrous,” Tang said.
“It is acceptable if it is used to strengthen capital flow, and raise funds in the short and medium term when the capital chain is broken.”
Hong Kong’s West Kowloon arts hub funding crisis ‘threatens to halt event deals’
Hong Kong’s West Kowloon arts hub funding crisis ‘threatens to halt event deals’
Hong Kong’s budget deficit is expected to balloon to HK$101.6 billion for the current financial year ending in March, almost double last year’s forecast given by the government. Chan said more borrowing would enable the government to maintain cash flow to finance major projects, such as the Northern Metropolis.
Tang, who served as finance chief from 2003 to 2007, ducked a question on whether Hong Kong had already plunged into a structural deficit as Tsang argued.
But he stressed that Chan had a duty to follow the principle stipulated in the Basic Law, the city’s mini-constitution, that the government needed to avoid deficits and keep expenditure within the limits of revenues.
“If you can be candid to citizens [about the dire financial situation], they can feel your respect and understand the rationale of the measures amid the challenges,” he said, referring to the city’s property downturn and soaring recurring expenditure.
Tang said that back in 2004 when he proposed issuing HK$20 billion in bonds, bankers described it as “a museum piece” as it was a rarely used tool then to solve the deficit problem.
Following measures to lure mainland Chinese tourists and launch renminbi business that year, he posted the city’s first budget surplus in five years in 2005.
Tang argued that Hong Kong was on the right track to revive its economy by finding new engines in technology and deepening cross-border integration.
Tsang’s remarks on the budget measures triggered heated debate on social media. He said that amid the high-interest rate environment, government bonds might not be as attractive to buyers as depositing their money in banks to secure higher rates of return.
30,000 yuan in duty-free? Hong Kong CPPCC members want new cap for mainland visitors
30,000 yuan in duty-free? Hong Kong CPPCC members want new cap for mainland visitors
He also worried that the city would eventually need to pay the debt’s interest expenses, which could affect its credit ratings, as well as saddle future generations with higher taxes and fewer public services.
On Monday, Tang also expressed support for the city’s coming national security legislation, a requirement under Article 23 of the city’s mini-constitution.
“Without stability, it’s hard to talk about economic development and livelihood improvements,” he said.
He added that countries, including Singapore, had been strengthening their own security legislation, urging the proposed law should be utilised effectively to gain investors’ confidence.
Harley-Davidson’s new CEO wants to transform how people think about the iconic motorcycle brand, so the company is trying something different.
This week, Harley announced a new strategy that focuses on lower-priced bikes, rather than relying on older, more affluent customers to buy its higher-margin touring models.
“Back to the Bricks builds on our core strengths and competitive advantages, harnessing the passion of our riders to deliver profitable growth for the Company and both our dealers and shareholders,” Harley CEO Artie Starrs said this week. “As we drive towards this new phase of growth, we remain committed to the craftsmanship and dedication that define our brand.”
Entry-level Harley-Davidsons cost about $13,000, while the higher-end Adventure Touring models average about $23,250, and the Premium Range &CVO models cost about $38,500, according to Reuters.
Harley’s new strategy targets a core profit of over $350 million from its motorcycle business by 2027 and over $150 million in cost reductions.
To kick off the new strategy, Harley is introducing Sprint, a new entry-level model powered by a smaller 440cc engine, later in the year.
What is Harley-Davidson’s “Back to the Bricks” strategy?
Harley’s new strategy relies on more than just pushing buyers toward cheaper vehicles to increase volume. The 123-year-old company has a set of five pillars on which it is building its future.
Harley-Davidson “Back to the Bricks” 5-point plan
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Deep appreciation of Harley-Davidson’s competitive advantages and legacy: The Company’s iconic brand, diversified and powerful revenue channels, and best-in-class dealer network provide a powerful foundation for growth.
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Renewed commitment to exclusive dealer network to drive enterprise profitability: Harley-Davidson’s dealers are a competitive advantage. The Company is planning actions to enable dealers to double profitability in 2026 and then double it again by 2029.
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Immediate actions to recapture share in areas where Harley-Davidson has right to win: Harley-Davidson has strong legacy equity in existing markets including new motorcycles, used motorcycles, Parts & Accessories, and Apparel & Licensing. The Company’s new strategy is focused on positioning the Company to regain share and drive meaningful volume growth in categories where it benefits from credibility, scale, and deep rider connection.
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Strong financial position with a path to stronger free cash flow and EBITDA margin: Cost and restructuring actions already underway support a path to stronger free cash flow and EBITDA margin over time.
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Bolstered management team with balance of fresh perspectives and institutional knowledge: Harley-Davidson has made a number of leadership appointments that support the Company as it leverages its innate strengths.
Written by Jitendra Parashar at The Motley Fool Canada
Dividend investing can be one of the simplest ways to build long-term wealth while creating a steady stream of passive income. But in my opinion, a good dividend stock is about much more than just a high yield. Beyond dividend yield, investors should also look for companies with durable businesses, reliable cash flows, and a history of rewarding shareholders consistently over time.
That’s exactly why many investors turn to financial stocks. Banks and asset managers often generate recurring earnings through lending, investing, and wealth management activities, allowing them to support stable dividend payments even during uncertain market conditions.
Two Canadian financial stocks that stand out right now are AGF Management (TSX:AGF.B) and Toronto-Dominion Bank (TSX:TD). Both companies offer attractive dividends backed by solid financial performance and long-term growth strategies. In this article, I’ll explain why these two financial stocks could be worth considering for income-focused investors right now.
AGF Management stock continues to reward shareholders
AGF Management is a Toronto-based asset manager with businesses across investments, private markets, and wealth management. Through these divisions, the company offers equity, fixed income, alternative, and multi-asset investment strategies to retail, institutional, and private wealth clients.
Following a 59% rally over the last 12 months, AGF stock currently trades at $16.67 per share with a market cap of roughly $1.1 billion. At current levels, the stock offers a quarterly dividend yield of 3.3%.
One reason behind AGF’s strong recent performance is its increasingly diversified business model. The company has expanded its investment capabilities and broadened its geographic reach, helping it perform well across varying market environments.
In the first quarter of its fiscal 2026 (ended in February), AGF posted free cash flow of $36 million, up 14% year over year (YoY), driven mainly by higher management, advisory, and administration fees. These fees climbed to $92.5 million as demand for the company’s investment offerings strengthened.
AGF has also been focusing on expanding its alternative investment business and introducing new investment products. With strong cash generation and growing demand for alternative investments, AGF Management looks well-positioned to continue rewarding investors over the long term.
TD Bank stock remains a dependable dividend giant
Toronto-Dominion Bank, or TD Bank, is one of North America’s largest banks, serving millions of customers through its Canadian banking, U.S. retail banking, wealth management and insurance, and wholesale banking operations.
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