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Eugene Tang

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world. Sign up now!
On Valentine’s Day, eight multicoloured lions carried out a boisterous dance around a ceremonial gong at Hong Kong’s stock exchange to mark the first trading day of the lunar calendar’s Year of the Dragon.
Chairwoman Laura Cha Shih May-lung and Financial Secretary Paul Chan Mo-po kicked off the day’s transactions by striking the gong with mallets wrapped in red cloth, watched by a congregation of the city’s top financial officials.
The occasion was also a prelude to a carefully calibrated changing of the guard at Hong Kong Exchanges and Clearing Limited (HKEX).
Nicolas Aguzin, the former JPMorgan private banker who took over in 2021 as chief executive, would hand over the reins two weeks later. Cha, the first woman to chair HKEX, is also scheduled to retire in late April during the exchange’s annual meeting, at which her successor is expected to be revealed.

The transition serves as a bookend to one of the most tumultuous periods for the exchange. Three years of the coronavirus pandemic led to an economic slump in Hong Kong and mainland China, which sapped consumption and hammered corporate earnings.
Global capital rushed to Wall Street after the US Federal Reserve raised its key interest rate by five percentage points from 2022, and initial public offerings (IPOs) slowed to a trickle in Hong Kong.
Deteriorating US-China ties exacerbated the malaise, as belligerent congressional members added Hong Kong-listed Chinese companies to their sanctions lists and put pressure on US investors to avoid exposure to China, including in sensitive technology.
The city’s benchmark Hang Seng Index has plunged 46.5 per cent in the past three years, and Hong Kong’s market value slipped from its third place globally after being overtaken by Japan, and was briefly surpassed by India in January.
A lot will be riding on the shoulders of Bonnie Chan Yiting, who took over from Gucho – as Aguzin is known to his friends – on March 1 as the first woman chief executive of the exchange.


Chan – who was the chief operating officer of HKEX before her promotion – had been busy laying the groundwork with her exchange colleagues to prepare for a rebound in market sentiments and the return of capital as interest rates are poised to fall this year.
Last year, the HKEX opened the door for companies to raise funds in Hong Kong dollars or the yuan through so-called dual-currency counters, a major step towards tapping the 1 trillion yuan (US$139 billion) in yuan deposits sitting in the city.
The exchange, which was the world’s top IPO destination for seven of the past 15 years, digitalised the fundraising process into a platform called FINI to cut the settlement period from five to two days.
Fundraising proceeds may more than double this year, positioning HKEX to claw its way back into the world’s top five destinations, KPMG said.
It launched a platform to make it easier for asset managers to sell funds to retail investors. After being bypassed in 2019 in Saudi Aramco’s US$29.4 billion stock sale, the HKEX signed a deal last year with the Tadawul exchange in Riyadh to create short cuts for Saudi companies to raise funds through secondary listings in Hong Kong.


Aguzin opened offices in New York and London – with Hong Kong’s iconic red taxi in tow – to expand the exchange’s global footprint and attract global companies to raise funds in Hong Kong. It also began to promote sustainability, making climate-related disclosures mandatory in alignment with global standards.
The exchange even tried to institute uninterrupted trading during typhoons, taking the axe to a 1950s rule that declared a non-trading recess whenever the city’s observatory issues a No 8 signal during strong cyclones. The public consultation for the controversial plan has wrapped up, and the HKEX is expected to announce a solution by July before the typhoon season starts in summer.
The central government in Beijing has also spared no efforts in giving Hong Kong a leg up. The city’s pool of offshore yuan received a 60 per cent boost during a 2022 upgrade that turned the yuan settlement programme into a permanent arrangement of 800 billion yuan.
The decade-old Connect transborder investment channel between Hong Kong, Shanghai and Shenzhen has been broadened to include bonds and wealth management products, in addition to stocks.


Even now, officials are advocating for cutting the financial threshold for taking part in the Connect scheme, which would open the floodgates for more capital to pour southwards to HKEX. The bourse signed an agreement with the nascent Beijing Stock Exchange last June to dual-list in each other’s market.
To be sure, the exchange CEO is not responsible for the stock market’s rise or fall. Still, all the preparations during the recent slump put the HKEX in a good position to benefit when the tide turns. HKEX reported its second-best financial results in its history this year, even amid the market slump.
Chan, who wrote the paper that formed the legal basis for the HKEX’s listing reforms to allow dual-class stocks, may draw some confidence from history.
The Hang Seng Index rose in each of the four dragon years in the lunar calendar going back to 1976, according to a study by the Post. Even in 2000, the lunar cycle managed to eke out a gain of 0.5 per cent in a market that slumped 11 per cent over the calendar year after the dotcom bubble burst.
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Video: Saudi Future Investment Institute holds first Asia conference in Hong Kong
Deep dives

Hong Kong bankers on ‘survival mode’ as IPO drought ends windfalls

‘The environment is very stressful right now, particularly for young investment bankers, says Jerry Chang, a consultant at Barons & Co


The landscape has shifted considerably since the last quarter, with an overall decrease in hiring across the investment banking sector: Robert Walters

Hong Kong’s market for initial public offerings (IPOs) is suffering from another sluggish start in 2024. Once a beacon of hope for retail investors looking for a windfall and a lucrative source of fees for investment bankers, listings have instead become a source of stress and job insecurity due to a drop in such activity.
This year, five companies have raised HK$2.18 billion (US$279 million) from their stock offerings in the first two months, according to data compiled by London Stock Exchange Group, the slowest momentum since 2011. In mainland China, 18 IPOs generated 15.2 billion yuan (US$2.1 billion), the least since 2016 at this stage. In contrast, the US market is enjoying its best run in three years, with 26 IPOs and US$6.3 billion in proceeds.
Read more

China’s fillip to bonds, wealth products is a leg up for Hong Kong

The policies will be a boon for central bank digital currencies such as Hong Kong’s e-HKD and the mainland’s e-CNY, as they get the go-ahead for simultaneous trials


Another new policy known as cross-boundary credit referencing will allow banks in Hong Kong and the mainland to share credit information of the companies

Hong Kong’s role as the trading hub for offshore yuan will get a leg up from the policies unveiled by the People’s Bank of China to enhance wealth management and the Bond Connect transborder investment channel, according to speakers at the Asian Financial Forum (AFF).
The new policies will also benefit Hong Kong’s developers as they relaxed cross-border payment rules between the 11 cities of the Greater Bay Area to make it easier for the residents of Hong Kong and Macau to buy homes in southern China, said New World Development’s Chief Financial Officer Edward Lau Fu-keung.
Read more

Hong Kong’s star shines as Greater Bay Area’s rich tap tax breaks, incentives

Greater Bay Area money flows have boosted Hong Kong’s wealth management assets nearly 30 per cent to US$3.9 trillion in the five years to the end of 2022


From February 26, the Wealth Management Connect scheme will be expanded for bay area residents with higher investment quotas and fund choices

February 18 marks five years since Beijing unveiled its blueprint to turn the Greater Bay Area into a hi-tech powerhouse by 2035. The region of more than 86 million people covers Hong Kong, Macau and nine Guangdong cities.
In the third of a four-part series, Enoch Yiu looks at Hong Kong’s progress in becoming the de facto wealth management hub for the wealthy, and what needs to done to stay on top.
Read more

Hong Kong IPOs: here’s what’s in store in 2024 after a miserable 2023

Hong Kong stock exchange’s IPO ranking sank to 8th this year, with fundraising slumping to US$5.9 billion from 68 listings


Analysts are confident Hong Kong can shrug off a dismal year, pointing to a slew of positive signs including potentially lower interest rates and China’s policy boost

When Chinese baijiu maker ZJLD Group raised HK$5.31 billion (US$676.4 million) in April, few would have expected it to be Hong Kong’s biggest initial public offering of the year.
It trailed China Tourism Group Duty Free’s US$2.3 billion IPO in 2022 and fell far short of short-video platform Kuaishou Tech’s US$6.2 billion listing the previous year. Hong Kong’s IPO value fell 53.5 per cent to a 20-year low of US$5.9 billion from 68 listings, according to Refinitiv data. Simply put, 2023 was dismal for IPOs.
Read more

Dual counter to lift Hong Kong’s yuan hub status, improve liquidity

The dual-currency counters will offer investors a choice of trading in Hong Kong dollars or in yuan and the two categories of shares will be fungible


The number of yuan-share class funds have near doubled to 377 at the end of 2022 from 191 in 2018

When veteran stockbroker Tom Chan Pak-lam first entered the securities industry in 1993, the yuan currency that he carried during his deal-making trips to China was strictly for spending on meals and hotels.
“Thirty years ago, international investors did not care about the yuan shares listed in Shanghai and Shenzhen,” said Chan, permanent honourable president of industry body Institute of Securities Dealers, while referring to the indifference towards the undervalued currency which was hard-pegged to the dollar.
Read more

Does Trump want to fence off Wall Street from Chinese firms?

Chinese companies are asking the ‘hard question’ of whether they should list in the US or Hong Kong


If the US cannot be viewed as a viable, stable counter party, ‘you’re going to get a competitor somewhere in the world’, says NYU finance professor

As the White House continues to put pressure on Beijing to reach a deal on trade, concerns are growing the Trump administration may try to shut Chinese companies out of capital markets in the United States.
It would mark a stark shift in policy and politicise what has been one of the key tenets that has fuelled massive gains in the US financial markets for decades – the free flow of capital.
Read more
Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world.
Sign up now!


Hong Kong stocks eye fresh inflows from mainland China’s insurers sitting on US$6 trillion

Hong Kong stock exchange moves to ease spin-offs and shareholder approval rules

For China’s hi-tech IPOs, it’s Hong Kong vs the mainland – but how much does it matter?

Hong Kong stocks decline after Fed raises interest rates and signals more to come

Hang Seng Index

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In this week’s issue of the Global Impact newsletter, we reflect on what is in store for Hong Kong’s stock market and its operator, the Hong Kong Exchanges and Clearing Limited (HKEX), in the Year of the Dragon. Photo: Reuters 

Bonnie Chan Yiting, chief executive officer of Hong Kong Exchanges & Clearing Ltd. (HKEX). Photo: Bloomberg

Photo: Jonathan Wong

Illustration: Brian Wang

Illustration: Ka-Kuen Lau

Illustration: Henry Wong

Illustration: Lau Ka-kuen

Illustration: SCMP

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In this week’s issue of the Global Impact newsletter, we reflect on renewed hope for the resumption of a search for Malaysia Airlines flight MH370 a decade after its mysterious disappearance. Photo: EPA-EFE

Photo: EPA-EFE

Photo: Hadi Azmi

Global Impact: China’s ‘two sessions’ rolls around at decisive moment for the world’s second-largest economy

In this week’s issue of the Global Impact newsletter, we look ahead to the ‘two sessions’, with China’s key annual meetings set to get under way in Beijing at a crucial time for the world’s second-largest economy. Photo: EPA-EFE

Photo: Xinhua

Photo: AFP

Global Impact: ‘Cuddly Grandpa’ Prabowo Subianto claims a victory for all Indonesians, defence minister to succeed Jokowi

In this issue of the Global Impact newsletter, we look back at the result of the recent Indonesian election, with Prabowo Subianto set to be the country’s next president, based on quick-count results. Photo: Reuters

In this issue of the Global Impact newsletter, we look back at the result of the recent Indonesian election, with Prabowo Subianto set to be the country’s next president, based on quick-count results. Photo: EPA-EFE

Photo: AP

Global Impact: what does China’s response to the Israel-Gaza war and Red Sea crisis say about its position as a world power?

In this issue of the Global Impact newsletter, we look at Beijing’s response to the Israel-Gaza war and the Red Sea crisis following attacks by Houthi rebels that have disrupted global shipping. Photo: TNS

In this issue of the Global Impact newsletter, we look at Beijing’s response to the Israel-Gaza war and the Red Sea crisis following attacks by Houthi rebels that have disrupted global shipping.Photo: Bloomberg

Photo: Reuters

Global Impact: what does a post-Apec US-China relationship, and their global competition, look like?

In this week’s issue of the Global Impact newsletter, we look to the future of the US-China relationship following the meeting between presidents Xi Jinping and Joe Biden in November. Photo: Xinhua

In this week’s issue of the Global Impact newsletter, we look to the future of the US-China relationship following the meeting between presidents Xi Jinping and Joe Biden in November. Photo: AP

Illustration: Davies Christian Surya

Photo: Bloomberg

Photo: Shutterstock Images

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Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world
In this week’s issue, we reflect on what is in store for Hong Kong’s stock market and its operator, the Hong Kong Exchanges and Clearing Limited (HKEX), in the Year of the Dragon


In this week’s issue of the Global Impact newsletter, we reflect on what is in store for Hong Kong’s stock market and its operator, the Hong Kong Exchanges and Clearing Limited (HKEX), in the Year of the Dragon.


Hong Kong stock exchange

China stock market

Hong Kong stock market

Global Impact