New HKEX chief has to shape the bourse’s future
- Nicolas Aguzin’s appointment as the first non-Chinese to run HKEX raised some eyebrows, given the continuing importance of attracting Chinese companies. While his experience guiding JPMorgan’s expansion into China would have weighed with the board, the question facing him now is, what next?
Nicolas Aguzin may have a hard act to follow as the new chief executive of Hong Kong Exchanges and Clearing (HKEX) but, as an international banker, the JPMorgan Chase veteran has his own role to play in the bourse’s development. The Securities and Futures Commission finally approved his appointment three weeks after HKEX was forced to announce it because the news had leaked.
When HKEX announced the choice of predecessor Charles Li Xiaojia a decade ago, it was only after the SFC had approved in writing.
Aguzin will be measured against Li, whose biggest achievements were the Connect scheme and listing reforms to help HKEX capture the initial public offerings and secondary listings of Chinese tech companies. However, HKEX has not had the same success in attracting non-Chinese listings. Of more than 2,000 stocks on the HKEX, only 85 are domiciled outside China and Hong Kong.
One of the challenges facing Aguzin, therefore, is how to strike a balance between “China’s offshore financial centre” and an international market place, with 90 per cent of HKEX’s capitalisation now attributable to China-domiciled companies. There is a lot of liquidity in the market, which should make it attractive for non-Chinese companies to list.
The appointment of the first non-Chinese to run HKEX raised some eyebrows, given the continuing importance of attracting Chinese companies. But Aguzin’s experience as a senior international banker who also guided JPMorgan’s expansion in China in recent years, would have weighed with the HKEX board in terms of strengthening international investor confidence.
Who is Nicolas Aguzin, the former JPMorgan banker set to lead HKEX?
At the same time, as Financial Secretary Paul Chan Mo-po has said, investors confident in China’s future know that Hong Kong is the only market they can freely trade. In that respect the Hong Kong government is supportive of HKEX in fostering stronger and closer ties with the mainland, as evidenced by the coming “bond connect” scheme. It remains the HKEX chief’s job to identify opportunities up north.
The question for Aguzin now is, what next? Board members may already envisage an international market in which Chinese money buys Western tech giants. We look forward to hearing Aguzin’s ideas. Hopefully he can ease doubts and convince critics.
