Bank of China

Lai See

PUBLISHED : Wednesday, 30 May, 2012, 12:00am
UPDATED : Wednesday, 30 May, 2012, 12:00am

Hongkonger at helm of Rusal could be under threat if Putin gets his way

There has been a further flurry of speculation that come June 15 when Hong Kong-listed Russian aluminium producer Rusal holds its AGM, Hong Kong's Barry Cheung Chun-yuen will be supplanted as chairman. This month, we reported that the writing was on the wall following Rusal's announcement that it was nominating Matthias Warnig for a seat as an independent non-executive director on its board. Warnig is apparently telling some people that he is to be the next chairman of Rusal.

Warnig is head of Nord Stream, which operates the gas pipeline from Russia to Europe, and is close to Russian President Vladimir Putin, which seems to count for a lot in this situation. He was previously chairman of the board at Russian pipeline giant Transneft, and a member of the supervisory board of Russian bank VEB. Putin was apparently irritated, maybe even annoyed, that his wish for a Russian to chair Rusal was not carried out when Barry Cheung was appointed chairman in March, after Viktor Vekselberg acrimoniously resigned.

Cheung, who is chairman of the Hong Kong Mercantile Exchange, was presumably appointed because he was trusted by Deripaska, who did not want another troublesome oligarch as chairman. Cheung is also Chinese, which is a plus since Rusal is desperate to make inroads into the China market. Its share price tumbled to an all-time low on May 18, to HK$4.44, or 59 per cent below its IPO price of HK$10.80. It closed yesterday at HK$4.70.

Asked if he had heard about the speculation over the chairmanship, Cheung said he had been told by people who ought to know that 'this is not the plan'. He said he was happy to work for the good of the company and its shareholders. But we got the impression that if his position were to change he would not be heartbroken.

Euro failure is a warning to others

Those who have been hoping for closer currency integration in Asia will have drawn little inspiration from listening to Eswar Prasad yesterday. He was previously head of the International Monetary Fund's China division, and now teaches at Cornell University in the United States. Speaking at the Foreign Correspondents' Club, he said the turmoil within the euro zone was changing the nature of the conversation regarding currency union in both Asia and Africa.

The clear message from Europe was that you needed strong institutions, particularly in terms of governance, to make currency union work. 'It is certainly going to set back any notion of closer currency integration in Asia and Africa,' he said. Lai See's view is that this is no bad thing and we should be grateful to the euro zone. Indeed you would think that after seeing the mess in Europe, nobody in their right mind would contemplate such an idea for many years to come.

Mystery of the Italian euro surplus

We wrote yesterday about the prefix letter before the serial numbers on euro notes that identify where they were printed, noting that the ones to look out for were the 'Y's since this was the designation for Greek euros. Following a Greek exit from the euro, these notes could overnight become drachmas and fall in value.

A reader informs us that of a sample of Euro50 and Euro100 notes purchased this month at Standard Chartered in Central, 8 per cent were issued by the German Bundesbank, 8 per cent by the National Bank of Belgium, 8 per cent by the Bank of Spain, 16 per cent per cent by the Austrian National Bank, and 60 per cent by the Bank of Italy. StanChart is clearly eager to unload Italian-issued euros. Does it know something about Italy's future membership of the euro zone that it is not telling its customers?

Call BOCHK for dead relatives' prizes

There was a bleak moment at Bank of China (Hong Kong)'s AGM yesterday when a shareholder was in tears as he described how his father won a lottery prize related to the bank's souvenir currency offer. His father died and bank staff refused to give him the prize as his father was not able to collect it in person. The management said it would look into the case and, slightly bizarrely, said that anyone with a similar problem could contact the bank.

Germans have broken their joy genes

A new study by Rheingold, a market-research and consultancy institute in Cologne, suggests Germans are incapable of enjoying life. The survey found 46 per cent of Germans say they are increasingly unable to enjoy anything due to the stress of everyday life and the feeling of being constantly reachable. Not only do Germans find it difficult to cut loose and experience pleasure, but their 'joy gene' is broken: 'We've forgotten how to enjoy ourselves,' researchers say. Many people have suspected this for some time.