|Bid||11.140 x 0|
|Ask||11.240 x 0|
|Day's Range||10.880 - 11.600|
|52 Week Range||3.830 - 17.020|
|Beta (5Y Monthly)||0.44|
|PE Ratio (TTM)||N/A|
|Earnings Date||Mar 27, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Jan 03, 2013|
|1y Target Est||5.30|
Hong Kong Exchanges and Clearing (HKEX) was backed into a corner by a news leak when it broke protocol two weeks ago in announcing its first appointment of a non-ethnic Chinese chief executive without first securing the written approval of the city's securities watchdog, according to a source familiar with the matter. The appointment of JPMorgan Chase's head of global private banking, Nicolas Aguzin, also known as Gucho, was leaked to news outlets on February 9, hours before any announcement by the HKEX, which itself is listed on the city's exchange. An urgent online meeting of the 13 directors of HKEX was called within an hour after the news was reported by the media, including the South China Morning Post and Bloomberg News, according to the source. Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. "We discussed three options and decided on the best option," the source added. The selection of JPMorgan Chase's Asia-Pacific chairman and CEO Nicolas Aguzin as the new HKEX CEO is subject to the approval of the SFC. Photo: Handout alt=The selection of JPMorgan Chase's Asia-Pacific chairman and CEO Nicolas Aguzin as the new HKEX CEO is subject to the approval of the SFC. Photo: Handout The first consideration was whether the board should deny the news but the board rejected such an idea immediately as Aguzin had already been identified as the best candidate a few months earlier, the source said. Another option was to decline to comment, but that was not ideal as HKEX is a listed company and has to follow listing rules to disclose any price sensitive information. Eventually, the board unanimously decided to announce the appointment after market close while noting the choice would need the approval of the Securities and Futures Commission or SFC. The board, the source added, found this as the most appropriate approach to maintain transparency and in public interest. The announcement by the HKEX before securing the SFC's approval is unusual. According to Hong Kong's Securities and Futures Ordinance, the exchange's nomination of a CEO requires the watchdog's approval in writing. The HKEX followed the rule to the letter when it announced Charles Li Xiaojia's appointment in June 2009. The source rejected market speculation that the HKEX released the appointment details before getting the SFC's approval in a bid to pressure the regulator to agree on its choice of CEO. "The HKEX fully respects the vetting decision of the SFC," the source added. A day after the HKEX's announcement, a special meeting convened by the SFC's board of directors decided it would spend an undefined amount of time to vet Aguzin to make sure he was "fit and proper" to run the exchange. Laura Cha, chairwoman of Hong Kong Exchanges & Clearing. Photo: Bloomberg alt=Laura Cha, chairwoman of Hong Kong Exchanges & Clearing. Photo: Bloomberg As CEO of HKEX, Aguzin will need to carefully balance the exchange's desire to expand globally and attract overseas companies to list in Hong Kong with policy directions emanating from Beijing. If the SFC approves Aguzin's candidacy, his leadership will take effect from May 24 for a term of three years. Aguzin would succeed Li - a former banker from the same US bank, who grew up in Beijing. During his 11 years at the exchange, Li established the different connect schemes with China to boost cross border stock and bond trading. Some brokers have voiced concern that Aguzin's lack of Cantonese or Mandarin skills would hamper his ability to communicate and build ties with China. Mainland companies account for 80 per cent of HKEX's US$7 trillion market capitalisation. HKEX chairwoman Laura Cha earlier had informed the board that she had communicated with some Hong Kong government and mainland officials that the new CEO could be a foreigner without giving a name, the source said. Beijing and the Hong Kong government were surprised but so far have not given any opinion. During the selection process last year, the exchange had considered Hongkongers, mainlanders and international candidates, the source said. After due diligence the board finally concluded that Aguzin was the best candidate considering his experience as a senior international banker who had guided JPMorgan's expansion in China in recent years. They also noted that the Argentinian's international network built assiduously over 30 years at the US bank would help expand HKEX's global outlook. As an international banker, Aguzin could also help to strengthen the confidence of international investors in Hong Kong as some have raised doubts about the future of the city after the social unrest in 2019 and introduction of national security law last year, the source said. If the board had considered a mainland banker for the CEO's position, it would not have added too much value to building and strengthening international ties. Under Cha's leadership, a former vice-chair of the China Securities Regulatory Commission from 2001 to 2004, the HKEX has a strong connection with mainland officials and will continue to make sure the bourse is contributing to China's development plan, the source added. Aguzin is aware of the challenges that lie ahead and knows China holds the key to HKEX's success. "I think China is leading the global unicorn race ahead of the US," Aguzin said in an interview with the Post in 2018. Some big Chinese companies have created an ecosystem for innovation and are incubating some of the best technologies in the e-commerce, financial, health care, mobility and entertainment sectors, the banker added in that interview. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
Hong Kong's Securities and Futures Commission (SFC) will conduct background checks on JPMorgan Chase & Co banker Nicolas Aguzin before deciding whether to approve his appointment as chief executive of the world's most valuable bourse operator, according to a person familiar with the deliberations. The SFC's 14-member board of directors met on Wednesday to discuss Hong Kong Exchanges and Clearing Limited's (HKEX) choice for their next leader and decided to inform the city's government it would conduct due diligence on Aguzin, the person familiar said. The SFC will review the candidate to check if he is a "fit and proper" person to run the exchange, including his work experience and background. During the unscheduled meeting, the regulator did not set an end date for the background checks. Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. HKEX named Argentinian national Aguzin as its next CEO on Tuesday, the first non-ethnic Chinese to step into the role, underscoring the bourse's ambition to be an international financial hub even as Beijing's influence spreads across the city. As CEO of the city's bourse, Aguzin will need to carefully balance the exchange's desire to expand globally and attract overseas companies to list in Hong Kong with policy directions emanating from Beijing. Nicolas Aguzin looks to take the helm at the HKEX. Photo: Reuters alt=Nicolas Aguzin looks to take the helm at the HKEX. Photo: Reuters The announcement by the HKEX, before securing the SFC's approval is unusual. HKEX announced Li's appointment on June 3, 2009, and said at the time that the SFC had approved its choice in writing. According to section 70 of Hong Kong's Securities and Futures Ordinance, HKEX's nomination of a CEO requires the SFC's approval in writing. The exchange initially planned to announce Aguzin's appointment after winning the SFC approval, but it released the news earlier than expected after Bloomberg and the South China Morning Post reported his move, according to another person familiar with the process. Laura Cha Shih May-lung, HKEX's chairwoman. Photo: Jonathan Wong alt=Laura Cha Shih May-lung, HKEX's chairwoman. Photo: Jonathan Wong Aguzin, known to his colleagues as "Gucho", is CEO of JPMorgan's international private bank. Before that, he was chairman and CEO of the US bank's operations across the Asia-Pacific region. "Given his background in international banking, and experience in Asia, he can help set HKEX's international strategy, which builds on our connectivity with the mainland market and opens up new opportunities with other major international financial centres," said Chan Ka-keung, chairman of WeLab bank, who is also Hong Kong's former secretary for financial services and the treasury. Aguzin would succeed Charles Li Xiaojia - a former banker from the same US bank, who grew up in Beijing and spent his childhood in Gansu province. Aguzin is not a Mandarin speaker. HKEX's fortunes are heavily dependent on continued investment flows from mainland China. New listings and investment funds flowing south from mainland China have swelled the city's market value to HK$54 trillion (US$7 trillion), helping Hong Kong surpass Tokyo to become the world's third-largest capital market. China-domiciled enterprises made up 52 per cent of the 2,545 companies listed in Hong Kong at the end of January, 90 per cent of the market's trading volume and 81 per cent of its capitalisation. If the SFC approves Aguzin's candidacy, his leadership would take effect from May 24 for a term of three years. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
Five Chinese mutual funds, armed to the teeth after their plans to invest in the world's largest stock sale were foiled, have deployed a new strategy to soothe investors: plough their US$6.2 billion of dry powder capital into Hong Kong's stocks.The strategy to invest in some of Asia's cheapest stocks appeared to have paid off, as Hong Kong's benchmark Hang Seng Index recovered beyond its pre-pandemic level last week to close in on 30,000 points, a level not seen since May 2019. Zhong Ou Innovation Future Fund has returned 23 per cent since October to investors, while the worst performer of the five returned 6.1 per cent, according to data on their websites.The rush of capital into Hong Kong explains why the city's stock market is riding a 20-month high, even as the local economy remains mired in its worst recession on record, with joblessness poised to jump to a multi-year high amid the raging coronavirus pandemic. Southbound capital, or funds that flow into Hong Kong via two cross-border investment channels called the Connect scheme with the Shanghai and Shenzhen bourses, has risen to successive daily records this week.Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China."The rally can be sustained as capital flows from the mainland show no signs of slowing down," said Kenny Tang Sing-hing, co-founder and chief executive of Royston Securities in Hong Kong. "Mainland investors may want to boost the capitalisation of Hong Kong's stock market. Chinese enterprises won't want to list in the US for safety reasons, so the market capitalisation here needs to be sufficiently big and deep enough in order to attract and absorb [the listing of] large Chinese companies."The five funds were established last October for unit holders to invest in Ant Group's US$35 billion dual listing on the Shanghai and Hong Kong exchanges. Each of the five funds raised 12 billion yuan (US$1.9 billion) within days, pledging up to 10 per cent of the capital to bid for Ant Group's shares.The IPO was suspended 48 hours before shares were due to begin trading, foiled by regulators amid a rush of new rules to prevent risk from China's fintech industry from spilling over into the broader banking system.Aggrieved investors pulled their funds, causing the combined size of the five funds to shrink by almost a third to 40 billion yuan. The five funds are under the management of China Universal Asset Management, E Fund Management, China Asset Management, Penghua Fund Management and Zhong Ou Asset Management. Ant Group's IPO halt leaves five mutual funds with US$9 billion in limbo, as potential first-day trading bonanza goes poofHong Kong-listed Chinese technology stocks were particularly sought after, as they provide the only way for mainland investors to partake in the growth of China's home-grown champions, according to the portfolios disclosed by four out of the five asset management firms.Tencent Holdings, China's largest games publisher, was the top holding for Zhong Ou, E Fund and China Universal, ranking number two among Penghua's investments as of January 14. Meituan the food delivery giant, Xiaomi the smartphone maker and Sunny Optical Technology Group, the producer of components for Apple's iPhones, were also among the funds' top 10 holdings.Tencent is now the world's sixth-largest company with a market cap of US$810 billion. Hong Kong Exchanges and Clearing, which is the world's largest bourse operator, capitalised at US$82 billion, is also among these funds' favourites."Technology and traditional sectors both have big weightings in Hong Kong's market," said Yin Yue, an analyst at Yuekai Securities. "Traditional sectors such as financials and automakers are expected to enjoy increases in both earnings and valuations amid the global recovery."Buying by the five funds has contributed to the HK$205.6 billion (US$26.5 billion) poured into Hong Kong's stock market so far this year by mainland investors, including HK$20.3 billion on Wednesday. They amoounted to almost 25 per cent of the net inflows for the whole of 2020.As much as 600 billion yuan of capital could flow into Hong Kong's stocks from mainland China in the coming years, according to a forecast by the country's largest investment bank, China International Capital Corporation (CICC), because of the local market's low valuation and the familiarity it offers to Chinese investors.Buying interest accelerated in January, as the funds were attracted by Hong Kong's low valuations. Among the Chinese stocks that are dual-listed on the mainland and in Hong Kong, China's yuan-denominated A shares were 34 per cent more expensive on average than their Hong Kong counterparts, according to a gauge tracking the price discrepancy between the two groups.Additional reporting by Martin ChoiThis article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.