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Morning Coffee: The mysterious future of Hong Kong ECM bankers

The mysterious future of Hong Kong ECM bankers

The ECM unknown

If you work in equity capital markets (ECM) in Hong Kong, you appear to have short and long-term reasons to be positive about your career prospects. Your city was the top destination for initial public offerings (IPOs) last year, while the proposed ‘IPO connect’ between Shanghai and Hong Kong may well attract more international firms to list in Hong Kong in the future.

In theory, if the IPO scheme – part of cross-border plans unveiled by Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia last week – goes ahead it could generate more listings (and more work for ECM bankers as a result). An increased number of large international companies would list in Hong Kong to gain access to mainland investors, according to Li, quoted in the South China Morning Post.

But some analysts aren’t as optimistic. Even if IPO connect gets up and running (the regulatory hurdles are high), they say Hong Kong bankers may not necessarily see many benefits. “If international investors under the proposed IPO connect can also subscribe to mainland companies’ A-share IPOs in Shanghai, then what is the point for mainland companies to list H-shares in Hong Kong? The IPO connect, if it is successful, would mean H-shares may lost their status,” Louis Tse Ming-kwong, director of VC Brokerage, told the SCMP.

Jeffrey Chan Lap-tak from Oriental Patron Financial Group, added: “When China gradually opens up its market and with more connect schemes going on, it would mean H-shares become less important when international investors have more direct access to the Shanghai and Shenzhen A-share markets.”

Meanwhile

Two junior employees at Agricultural Bank of China accused of embezzling $578m for stock market bet that went wrong. (Financial Times)

Keppel Corp ‘consolidates’ asset management businesses, but won’t cut jobs. (Straits Times)

ANZ seeks new head of international and institutional banking after Andrew Géczy steps down. (Bloomberg)

Asset manager Baillie Gifford opens in Hong Kong. (Asian Investor)

JD Capital hires for new wealth unit. (Asian Investor)

UOB Kay Hian representative punished for insider trading. (Channel News Asia)

Hong Kong is still the world’s least affordable city. (South China Morning Post)

Westpac employee sues bank claiming he missed out on a A$300k pay rise because of his Indian ethnicity. (AFR)

KKR teams up with a large state-owned Chinese asset manager. (Reuters)

HSBC names new head of New Zealand business. (New Zealand Herald)



Image credit: alexali111, iStock, Thinkstock

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