HK bourse CEO says China expansion will bring 'big bang of finance'

Singapore

HONG Kong Exchanges & Clearing chief executive officer Nicolas Aguzin said that China's continued expansion will bring about the next "big bang of finance" as the country will look outward to expand investments.

Speaking via a video link to the Bloomberg New Economy Forum in Singapore on Friday (Nov 19), he said that China's capital market will triple over the next 10 years and the country will eventually emerge as the largest economy in the world.

He hit back at any talk of decoupling between China and the rest of the world. "Whatever indicator you look you are seeing more and more interaction," he pointed out.

Still, the city's bourse has been hit by some setbacks recently.

It suffered its second consecutive quarterly profit decline in the 3 months that ended in September against a backdrop of a widening crackdown by China on a broad range of sectors that roiled markets and triggered delays of major initial public offerings (IPOs).

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The amount raised in IPOs slid 40 per cent in the quarter from a year earlier.

Aguzin said that in the short term there will be more regulatory pressure, but that in the medium to long term, this regulatory push will "set rules of the game and a lot of countries will probably follow".

China has also said it will require technology companies seeking a listing in Hong Kong to undergo a cybersecurity review as part of sweeping new rules aimed at tightening control of information amassed by private firms.

The review could damp offerings in the city by Chinese tech firms, which were counting on pivoting toward going public in Hong Kong without needing approval.

Speaking at the same panel, Gary Rieschel, the founding managing partner at Qiming Venture Partners, said the increased regulations could have an impact on capital flows into China.

While there is a danger of regulatory overreach, Hong Kong's market could succeed if it maintains its independence, he added. BLOOMBERG