Hong Kong exchange chief warns of economic ‘devastation’ from protests

(L-R) The Hong Kong Exchanges flag, Chinese national flag and Hong Kong flag are hoisted outside the Hong Kong Stocks Exchange in Hong Kong June 7, 2016. REUTERS/Bobby Yip

The “depth of the devastation” inflicted on Hong Kong‘s economy by more than six months of anti-government protests will be seen in the coming weeks, the chief of the city’s stock exchange operator said on Thursday.

The warning came as Hong Kong-based companies are expected to show the scars of the sometimes violent protests that forced businesses to shut and scared away visitors over the next few weeks when they report their annual results.

“I think local listed companies with local exposure are going to take a very big hit. They already are taking a big hit,” Charles Li, CEO of Hong Kong Exchanges and Clearing Ltd (HKEX), told a Reuters Breakingviews event.

HKEX itself posted its steepest profit slide in nearly three years in the third quarter, as investor sentiment was hit by months of unrest that pushed the city into recession for the first time in a decade.

The protests have evolved over the months into a broad pro-democracy campaign, with demands for universal suffrage and an independent inquiry into complaints of police brutality.

Many people are angered by what they see as Beijing’s ever-tightening grip on the city that was promised a high degree of autonomy under the “one country, two systems” formula under which it returned to Chinese rule in 1997.

Beijing denies interference in the former British colony and blames the West for fomenting the unrest.

Li said what made Hong Kong great was “one country, two systems”, and that he believed China would fundamentally come to the judgment that the two systems worked for the world’s second-largest economy, even in the worst-case scenario.

HKEX earnings for 2019 are expected to be bolstered by a pick-up in share sales in the fourth quarter, with Chinese e-commerce giant Alibaba raising almost $13 billion from its secondary listing in Hong Kong.

Referring to Alibaba, which in 2013 dropped plans for a primary listing in Hong Kong and turned instead to New York due to rigid listing rules, Li said the exchange needed to eliminate barriers for companies to return.

HKEX launched a surprise $39-billion approach for the London Stock Exchange Group in September but withdrew it after failing to convince LSE management and investors to back the move.

On potential acquisitions, Li said all options were on the table.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.