New | Hong Kong IPO crown safe for now, says Morgan Stanley
Morgan Stanley seeks to tap the opportunities arising from the synergies between private wealth management and investment banking
Hong Kong has nothing to lose from the opening of mainland China's US$4.5 trillion equity markets - and that includes its leadership in lucrative initial public offerings, according to the banker whose team landed the most deals in the city last year.
"There are a variety of issues outside of just access to capital that would dictate wanting to list in Hong Kong and I don't think those change in a hurry," Gokul Laroia, the co-chief executive of Morgan Stanley Asia-Pacific and head of the bank's pan-Asian equity operations, told the South China Morning Post.
Companies raised US$29.8 billion in listings in the city last year, according to data from Thomson Reuters, making it the world's No 2 market for flotations. In value terms, Morgan Stanley led more of them than any other institution.
The bank has much reason to believe in Hong Kong's staying power as a capital-raising centre, given the crucial role listings have in the firm's business strategy.
"The relationship between the entrepreneur and the company in Asia is a very close one. Our view is that if you bank the entrepreneur, you bank the company; if you bank the company, you bank the entrepreneur," said Laroia, who is also the head of Morgan Stanley's private wealth management business in Asia.
In simple terms, mainland Chinese listings create billionaires and those billionaires need to be banked. There are about 100 good-sized private-sector listings from mainland China every year and that means 100 ultra-wealthy new customers to serve.