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Daily Dispatches – Raining princelings

Uneasy is the head that wears the crown (Image: Wikipedia)

Uneasy is the head that wears the crown (Image: Wikipedia)

Hiring the sons and daughters of influential Chinese politicians, bureaucrats and business people is widespread, and not limited to just a handful of banks, according to a report in the Wall Street Journal.

The Journal says the IPOs of Agricultural Bank of China in 2010 and Industrial & Commercial Bank of China in 2006, which raised $22 billion apiece, were advised by a number of international banks, several of whom had employed so-called ‘princelings’. 

Merrill Lynch, now part of Bank of America, was one of the lead banks on the IPO of ICBC. In 2004, it hired Wilson Feng, the son-in-law of a high-ranking Chinese politician, to work in the firm’s China office.

Merrill Lynch also employed Margaret Ren, the daughter-in-law of a former Chinese premier. Ren has been the China chairman since late last year, her second stint at the bank. Previously she worked at BNP Paribas, Citigroup and Bear Stearns. During her time at Citigroup, the bank worked on the US$3.5 billion China Life Insurance IPO in 2003. 

Goldman Sachs Group played a key role in the Agricultural Bank of China deal. Goldman banker Hong Ning who worked on that listing is married to a relative of Wang Qishan, who previously helped coordinate China’s financial policy and in late 2012 became the party’s chief anti-corruption enforcer.

Australia’s Macquarie Group landed key deals during China’s IPO boom and also employed a couple of China’s princelings, including Raymond Sun, the son-in-law of a former railway minister.

During his tenure, the bank worked on the China Railway Construction Corp and the US$1.6 billion China South Locomotive & Rolling Stock, among a number of other deals that spanned industries like banking, construction and paper.

Malaysia’s central bank blocks BIMB’s bid for Bank Islam

Reuters reports that Malaysia’s central bank has rejected plans by BIMB Holdings Bhd to issue an Islamic bond and raise US$884 million to gain full control of Bank Islam, the country’s oldest and largest standalone Islamic bank.
BIMB last month proposed a 10-year Islamic bond or sukuk of US$456.66 million as part of a plan to acquire the 49% it does not own in Bank Islam.

Malaysia’s central bank has rejected BIMB’s proposal to secure the sukuk with shares of the company, which will need to identify an alternative asset for the exercise.

Bank of China signs cooperation deal with South Africa’s Nedbank

The ninth largest bank in the world, Bank of China, and one of South Africa’s big four banks, Nedbank, have entered into a strategic business cooperation agreement to boost business between China and Africa, according to Chinese website ECN.

The alliance will support clients of the BOC as they look to grow and invest in South Africa and the rest of the continent and provide support for Nedbank clients expanding into China.

China is South Africa’s most significant trading partner in terms of both exports and imports. The BOC deal comes more than four years after Industrial & Commercial Bank of China’s acquisition of 20% of Standard bank, the largest bank in Africa.

New HK trading floor for Nomura

Nomura is planning a new trading floor in Hong Kong by the end of this year, and the bank is convinced that the upheaval in regional markets in recent months may be past its worst.

“We’re through the worst of the crisis but it doesn’t mean individual countries won’t continue to suffer significant challenges,” Steve Ashley, London-based head of global markets at Nomura told Bloomberg. “We remain relatively positive on the longer term performance of risk assets in Asian emerging markets.”

The outlook for Asian emerging markets remained “very positive” over the next five to 10 years as the amount of investments by funds in these countries would likely have to catch up with the growing size of their economies, Ashley said last week.

The rosy outlook for Asian emerging markets was providing an opportunity for Nomura ex-Japan, and the number of Nomura clients in for the global markets division doubled in the past three years, he said.

When the shoe is on the other foot

We are all familiar with employee surveys that poll staff about their bosses and the companies they work for. But in a different take on ‘engagement’, the Sydney Morning Herald asked bosses what they think of their staff.

Among the gripes were frustration with being “treated like s*%$” and not being able to leave work behind at the end of a working day. 

Owner/managers said they had to deal with a lot of stress, demands from former spouses, cashflow worries, and a major irritation; staff whingeing.

SMH said the final word from bosses was that no-one was irreplaceable.”Not even the prime minister of Australia. You can only push us so far.”

A role model for bank bosses to follow

Don’t you just hate it when someone else shows you up? Bloomberg reports that PC giant Lenovo’s CEO Yang Yuanqing has once again put pressure on some of the world’s best paid executives, including bank bosses who have come under fire for years now about lucrative packages, even as their institutions floundered.

For a second year running Yuanqing will share more than US$3 million of his annual bonus with staff after the company posted record sales.

About 10,000 workers would get payments this month to recognise their contributions, with each receiving about US$325. “This is quite rare, especially for a chairman of a Chinese company, to use his personal money as a bonus to reward employees,” Kirk Yang, a managing director at Barclays Plc in Hong Kong told Bloomberg.  

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