Hong Kong

Hong Kong’s opening leaves it long way from normal

23 Sep 2022

The city will no longer quarantine arrivals. It may lure Wall Street bosses to a key banking summit. But with China's mainland unlikely to reciprocate access, Hong Kong will go on struggling. Its recessionary status is leader John Lee’s best hope of winning more relaxations.

China’s battery maker has an IPO charging problem

15 Sep 2022

China Aviation Lithium is low on power ahead of its $1.5 bln Hong Kong float. The CATL wannabe is growing fast but its profit leans on government subsidies. Throw in high dependence on a single automaker and ties to a sanctioned entity, and it looks like a difficult ride.

Ping An’s HSBC campaign fails the financial test

7 Sep 2022

The Chinese insurer has doubled down on its call for the $123 bln bank to spin off its Asian unit. Doing so would put cross-border revenue at risk and raise funding costs. To make it worthwhile, the business would have to snag a premium to most regional peers. That’s unlikely.

Hong Kong seeks VIP cure for strategic ills

7 Sep 2022

Central bank boss Eddie Yue wants to lure global financiers to the city's November confab, but they’re unlikely to agree without quarantine waivers. That risks local ire, but Yue has little choice. Hong Kong is losing ground. If the elite can’t come, opportunity may go elsewhere.

China-U.S. audit deal success is a long way off

26 Aug 2022

Officials may be close to allowing Americans to inspect mainland audit files in Hong Kong, per media reports. New York-listed Alibaba and peers jumped on hopes they can remain listed. Yet a successful accord will need a level of cooperation not seen in 15 years of wrangling.

Long arm of China law reaches today from Tomorrow

22 Aug 2022

Xiao Jianhua, the man behind the dismembered investment colossus, has been convicted of graft and illegal use of funds five years after he was snatched from Hong Kong. His fate is a timely reminder that Beijing is determined to show that no company or person is too big to fail.

Hong Kong’s tiny floats are filled with big risks

19 Aug 2022

A biotech firm sold just 2% of shares in its IPO, highlighting a trend of relatively illiquid stocks coming to market. It’s a way to prop up valuations. Yet issuers will struggle to raise more funds and the added volatility worsens the city’s dismal secondary market performance.

Caymans gives Hong Kong tycoons a head start

11 Aug 2022

Thomas Lau’s $240 mln retail buyout is the Asian hub’s first deal since the Caribbean haven dropped an archaic rule tying approval to voter numbers as well as shareholdings. The law invited abuse, but also gave small investors some rare power. Nixing poor offers just got harder.

Bubble stock spike harks back to Hong Kong habits

5 Aug 2022

Shares in AMTD Digital soared up to 21,000% in three weeks in New York, even as bosses acknowledge there’s no reason for it. The surge has meme stock traits. But a majority owner and small float give it more in common with puzzling penny-stock moves in its Asian home.

HSBC’s cross-border ties are paying dividends

1 Aug 2022

CEO Noel Quinn promised a 12% return on tangible equity and higher payouts to shareholders as the global bank rebuffed Ping An’s breakup call. Higher U.S. interest rates help, but if the Chinese insurer has spurred the $125 bln bank to raise its game, all investors will benefit.

Cathay Pacific charts hopeful course for Hong Kong

18 Jul 2022

Huge capacity cuts and a bailout put a lid on debt as quarantine rules keep its home city isolated. Its shares, better performing than Singaporean and Western peers, imply the airline and the Asian hub will make a quick turnaround. But it faces a harder slog back to normal.

Hong Kong banks are slow to gain from rate rises

7 Jul 2022

The Asian hub must track the Fed’s rate hikes to preserve its currency peg, but commercial lenders can’t follow so quickly. That reflects China’s weak growth and long term, the awkwardness of the 39-year-old system. Near term, it’s a profit drag for HSBC and Standard Chartered.

Hong Kong’s last governor on dealing with China

21 Jun 2022

Chris Patten was Britain’s top representative in the colony before its handover 25 years ago. In this edition of The Exchange podcast he talks about his newly published diaries, businesses sucking up to the People’s Republic, and whether the West will defend international rules.

WM Motor fundraise will test its anti-Tesla appeal

1 Jun 2022

Founder Freeman Shen missed a chance grabbed by rivals Xpeng and Li Auto to float when valuations were high, stalling his dream of mass-producing affordable electric cars. An IPO filing reveals deep losses; hoped-for economies of scale may be harder to achieve in tough times too.

Fourth time to be the charm for Richard Li’s IPO

1 Jun 2022

Poor markets have derailed insurer FWD’s $1 bln float. That’s the third delay after a costly Hong Kong to New York round trip, and a flirt with super voting stock. The pause gives the tycoon time to improve the Asian-focused company’s profit record and to freshen its pitch.

HSBC’s jarring ESG message, Davos in spring

26 May 2022

The bank’s head of responsible investing believes policymakers are exaggerating the financial risks of climate change. In this Viewsroom podcast, Breakingviews columnists discuss the ramifications of those remarks. Plus: The World Economic Forum is back, but the mood is dour.

HSBC’s green loose cannon misfires at a bad time

23 May 2022

The $123 bln bank has distanced itself from a senior executive who said investors needn’t fear climate risk. His message jars. The energy crisis gives lenders cover to go slow on restrictive net-zero goals, but stakeholders may demur if they fear this is what they really think.

Hong Kong can afford slow road to digital currency

19 May 2022

There’s some FOMO in the local e-HKD effort. Central banks elsewhere have better reasons to act faster, including low rates of financial inclusion and less use of physical cash. Hong Kong would do well to think longer about privacy concerns and to learn from other experiments.

Hong Kong co-living boom bets on more lonely years

17 May 2022

Warburg Pincus is among those buying hotels in the Asian hub to convert into upscale shared digs for millennials. Given a 99% drop in visitors in the past three years and a belief that won’t reverse soon as officials stick with China’s zero-Covid policy, more deals look likely.

Vodafone’s deal zeal is a risk factor

12 May 2022

The telecoms group may combine its UK business with smaller rival Three, owned by Hong Kong’s CK Hutchison. Its 39 bln pound debt pile makes a joint venture more likely than an outright purchase. CEO Nick Read’s eagerness to hook up means he may not secure the best deal possible.