NINE YEARS AGO Hong Kong was a city of limitless ambition. Property and share markets were booming and a pilot programme of mainland stock offerings promised to transform the future SAR into China's Wall Street.
In the grip of a furious bull market, then HSBC chairman Sir William Purves captured the euphoria of the moment, predicting that Hong Kong would become the world's biggest stock market by 2018. 'We might see that the Hang Seng Index has become the world's principal financial pulse,' Sir William waxed.
He may yet be proven right, but for now 1993 represents Hong Kong's high water mark. Today it is increasingly a backwater for global money managers. There is a renewed interest in Asian markets, but funds are flowing to centres such as South Korea.
A small group of big, blue-chip stocks means Hong Kong remains an important funds destination but the broadening and deepening that has characterised other markets has not happened.
Much water has flowed under the bridge since Sir William's big prediction, but what worries SAR promoters is how little has changed. Despite a shotgun marriage of the stocks and futures exchanges after the 1998 financial crisis, investor abuses remain an endemic market feature while recourse is hard to achieve.
Market discipline is a powerful agent of change and declining market champions of yesteryear are being replaced by an emerging band of best-of-breed manufacturers benefitting from economies of scale and ruthless out-sourcing by international brand-name operators.
