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Enoch Yiu

In six years as the chairman of Hong Kong Exchanges and Clearing, Ronald Arculli has been praised for a number of initiatives that boosted the market - but he has also faced his share of criticism.
Arculli brought the importance of attracting international companies to choose Hong Kong for their initial public offerings to the forefront of the exchange's growth policies, helping make the exchange the world's leading IPO market for the past three years. 
But as he steps down today, some will remember the controversies: the suspension of a number of listings soon after going public is one, and, more recently, the complaints from the very brokers who work in the exchange about shorter lunch breaks.
Fabric maker Hontex International was suspended from trading three months after it listed on Christmas Eve in 2009 following allegations from the Securities and Futures Commission that its prospectus contained misleading information. 
In the past two months, the Financial Reporting Council has put 13 cases on the watchlist for alleged accounting problems, including some newly listed mainland firms.
Arculli denied the exchange had lowered the standards for offerings, resulting in questionable listings by mainland companies.
'The exchange can only rely on investment banks acting as sponsors as well as accountants and lawyers to check on the accuracy of the information provided by the companies. Investors should be aware of the risks of investing in any company,' he said.
Arculli, a lawyer, is no stranger to risks. As chairman of the Hong Kong Jockey Club in the early 2000s, he introduced soccer betting to the city.
'Ronald Arculli knows how to deal with different segments of people. He is also good at introducing new projects,'' said Chim Pui-chung, the legislator for the financial services sector. 
'Mr Arculli has chaired both the Jockey Club and stock exchange. People make money from betting on horse racing and stock-market trading and Arculli knows how to bring them in,' Chim said.
Under Arculli, the Hang Seng Index reached a peak of 31,638.22 points in October 2007, while daily turnover soared to HK$210 billion. However, by the following year the financial crisis caused it to fall more than 60 per cent before bouncing back to current levels at around 20,000.
Despite the rebound, daily turnover is still hovering in the HK$50 billion range. 
Paul Chan Mo-po, the legislator for the accountancy sector, said Arculli's drive to attract overseas companies had bolstered the exchange's image as an international market. 
'The exchange previously focused only on bringing mainland companies to list here. Mr Arculli has done a lot of work to attract international listings. This has strengthened Hong Kong as an international market,' Chan said.
Arculli even went on the road in the United States and Europe and talked directly with government officials and top executives, urging them to list in Hong Kong.
Some of the big names to list in Hong Kong include US insurer AIA, Italian fashion retailer Prada and Russian aluminium firm Rusal.
 At the end of last year, 147 international companies were listed in Hong Kong, representing 19 per cent of the market's capitalisation. 
Last year, overseas firms accounted for 51 per cent of IPO funds raised in Hong Kong. Mainland companies contributed more than 30 per cent, while the remainder came from Hong Kong firms.
Arculli thanked the global financial crisis in 2008 and 2009, which mauled the US and Europe while leaving Hong Kong and Asia relatively untouched, for the increase. 
'Companies could not tap funds in the West and thus Hong Kong came into consideration,' Arculli said. 
'We expect the trend will continue as the euro zone crisis is not settled. Also, many companies want to expand in Asia and they think a Hong Kong listing will get them closer to their investors and customers.'
Arculli believes the leading emerging markets of Brazil, Russia, India, China and South Africa will play an important role in the international market. In October, HKEx formed an alliance with the stock exchanges in the BRICS countries.
Despite his work for the exchange, brokers have emerged as a dissenting voice over cuts to their midday meal break. 
'Mr Arculli has not spent enough time communicating with local brokers and he does not understand the difficulties many of them have,' said Christopher Cheung Wah-fung, the chairman of Christfund Securities.
'Despite opposition from brokers, Mr Arculli still insisted on cutting the lunch break short. He did not understand that this has made life more difficult for small players who do not have the staff to make shifts.'
In March, the lunch break was cut to one hour. This came a year after the two-hour break was reduced to 90 minutes. Meanwhile, the exchange also began trading 30 minutes earlier. The exchange now trades for 51/2 hours a day, compared with four hours.
Arculli said he did understand the difficulties but Hong Kong had to catch up. 'Many markets have no lunch break and they trade six to eight hours a day,' he said. 'We introduced the extension in two rounds in a bid to help the market adjust.'
HKEx rules mean Arculli cannot be elected again but he will remain as a director for one year to enable him to finish his role as the chairman of the World Federation of Exchanges. 
However, a complete retirement may not be on the cards.
'I will spend more time at my own law firm and with my family,' he said. 'I think my wife would be happy about this.'
Former MTR Corp chief executive Chow Chung-kong is widely expected to be elected Arculli's successor tomorrow by the HKEx board. Favoured by the government, brokers and lawmakers are worried about Chow's lack of experience in exchange affairs. 
Arculli, however, has no such fears. 'Mr Chow has a lot of international experience in Britain and Australia. He is well qualified to take the top job at the exchange,'' he said.
There are always bad apples... No stock exchange can ensure no companies will have problems Ronald arculli
31,638 
The Hang Seng Index topped this figure in October 2007
- It has since fallen more than 60 per cent to about 20,000



Taking stock of a challenging role