This article**: Times Weekly Author: Huang Jiaxiang.
In less than half a year, the Hong Kong Stock Exchange (00388.HK) will bid farewell to the internationally renowned exchange with the first non-Chinese chief executive officer, El Aguzin, to be succeeded by current co-chief operating officer, Anthony Chan.
On the evening of December 15, the Hong Kong Stock Exchange announced that Aguzin will not seek re-election after the end of his term in May 2024. At the same time, the Board announced the appointment of Chan Yiting as the next Chief Executive Officer of HKEX, effective 24 May 2024, for a term of three years until 23 May 2027. She will be the fifth Chief Executive Officer and the first female Chief Executive Officer of HKEX since its merger and listing in 2000.
The Board of Directors would like to thank Aguzin for his leadership and contribution over the past two and a half years in a particularly difficult macro environment created by the pandemic and the global market downturn. During his tenure, Aguzin led the implementation of a number of major strategic initiatives and the international rollout of HKEX, opened new offices in New York and London, and led the development and refinement of a range of products and platforms, including driving growth in HKEX's derivatives and ETF markets, HKEX said.
There are many challenges left for his successor, Chen Yiting. Since the beginning of this year, the trading in the secondary market of Hong Kong stocks has continued to be sluggish, and the amount of IPO funds raised has also shrunk significantly, and Ernst & Young expects that the amount of IPO funds raised in Hong Kong stocks this year will be the lowest in the same period in the past 20 years. How to lead the reform of the Hong Kong Stock Exchange to break out of the encirclement will be Chen Yiting's next important task.
The first non-ethnic Chinese CEO will bid farewell to the Hong Kong Stock Exchange
As his term is about to expire, the news of whether the Champions League can be renewed has been fermenting in the market for nearly one month, and now it has finally settled.
On 24 May 2021, Aguzin was appointed Chief Executive Officer of HKEX for a three-year term. Aguzin, the first non-Chinese CEO of the Hong Kong Stock Exchange, is an Argentinian and holds a Bachelor of Science (Economics) degree from the Wharton School of the University of Pennsylvania.
Like the former CEO of the Hong Kong Stock Exchange, Charles Lee, Aguzin is also from the international investment bank JPMorgan Chase. Mr. Aguzin joined J.P. Morgan in 1990 and has held a number of leadership positions across the bank's businesses and geographies, including Chief Executive Officer, J.P. Morgan Asia Pacific, and Chief Executive Officer, International Markets, J.P. Morgan Private Banking.
In the two and a half years that Champions League has been at the helm of the Hong Kong Stock Exchange, the Hong Kong market has been under great pressure. IPO proceeds fell from HK$331.4 billion in 2021 to HK$104.6 billion in 2022. In the first three quarters of this year, the Hong Kong Stock Exchange's IPO raised HK$24.6 billion, ranking eighth in the world. According to a report released by Ernst & Young a few days ago, a total of 61 companies are expected to be listed in the Hong Kong market in 2023, a year-on-year decrease of 19%.The amount raised was HK$41.3 billion, down 59% year-on-year and the lowest in the same period in nearly 20 years.
During the tenure of the Champions League, the overall trading of the Hong Kong market was also relatively sluggish, especially since the beginning of this year, which has continued to cause market concerns.
In the face of multiple challenges, Aguzin has led the HKEX in the past two and a half years to continue to promote institutional reform and product innovation, including the establishment of a new SPAC listing mechanism, a lower listing threshold for specialist technology companies, an enhancement of the Stock Connect mechanism, an expansion of the scope of Stock Connect, the launch of Swap Connect, the establishment of a carbon trading platform, the launch of the "HKD-RMB Dual Counter Model" and the Dual Counter Market Making Scheme, as well as the imminent implementation of the GEM reform of the Hong Kong Stock Exchange.
Promoting the international promotion of Hong Kong's financial market is also an important measure during the promotion of the Champions League. He led the establishment of international offices in New York and London, and led to the signing of memorandums of understanding (MoU) with the Saudi Exchange and the Indonesia Exchange respectively, which included them in the list of recognised exchanges, allowing companies listed on the Main Board of the two exchanges to apply for secondary listings on the Hong Kong Stock Exchange.
HKEX Chairman Laura Cha said, "On behalf of the Board, I would like to thank Nicolas Aguzin for leading HKEX during these challenging times. During his tenure, he played an important role in promoting the international promotion of Hong Kong's financial markets, resuming dialogue and connectivity in the post-pandemic era, and ensuring the normal operation of the Hong Kong Stock Exchange. We fully respect his decision to pursue new developments and wish him all the best for the future. We look forward to working closely with him in the coming months to ensure a smooth leadership transition." ”
It has been the privilege of my life to lead the HKEX. Our mission is very important to me, and when I started working at HKEX, we began to fulfill our mission to connect, promote and develop financial markets and society for prosperity together. I believe that we have succeeded in this regard, laying a solid foundation for the financial industry to continue to promote the development of the real economy in the future. Champions League said.
Aguzin believes that HKEX's unique strength lies in its ability to connect China with the world, and during his tenure, HKEX has been firmly committed to ensuring the attractiveness, competitiveness and connectivity of the Hong Kong market, successfully supporting clients and stakeholders around the world. Despite the challenging and volatile macro environment, the HKEX team is proud to have implemented a number of strategic initiatives and projects over the past two years. "I will continue to work closely with the team in the coming months to ensure a smooth and seamless transition to the Group's leadership. ”
The multiple challenges of the first female CEO of the Hong Kong Stock Exchange
At the same time as ushering in the first female CEO, the top management of the Hong Kong Stock Exchange also ushered in a major adjustment.
HKEX's next CEO will be replaced by Anthony Chan, who will continue to serve as Co-Chief Operating OfficerHKEX has also appointed its Chief Financial Officer, Ms Lau, as Co-Chief Operating Officer. The appointments have been approved by the Securities and Futures Commission of Hong Kong and are also effective from 24 May 2024.
Aged 54, holds a Bachelor of Laws degree from the University of Hong Kong and a Master of Laws degree from Harvard Law School in the United States, and has over 30 years of experience in law and financial services.
Chen Yiting;Source: Hong Kong Stock Exchange.
From 2007 to 2010, she was the Head of the Initial Public Offering (IPO) Department of the Listing Division of the Hong Kong Stock ExchangeFrom 2010 to 2019, he was a partner at Davis Polk & Polk, where he worked with clients in a wide range of industries in Hong Kong and Asia. After Laura Cha became Chairman of HKEX, she rejoined HKEX in January 2020 as Head of Listing. She has also served as a member of the Taxation Commission of the Hong Kong Special Administrative Region** and a board member of the Financial Services Development Council of Hong Kong, and was an ex-officio member of the Hong Kong Standing Committee on Company Law Reform from 2020 to 2022.
Laura Cha said that Chan is a well-known capital markets executive who was previously a leading lawyer and led the listing division of the Hong Kong Stock Exchange. She has a deep understanding of HKEX's business and the competitive landscape in the industry, and has played a key role in driving the execution of HKEX's strategy over the past few years. With the support of Yiu Ka-yan, Lau and the entire management team, Chan will lead HKEX to continue to deliver on its mission and vision to support Hong Kong's long-term development as an international financial centre and to enrich HKEX's markets, products and services around the world.
HKEX's new CEO will face multiple challenges. Hong Kong is the world's leading IPO fundraising destination, having topped the global IPO fundraising charts for seven of the past 15 years. However, in the past two years, the Hong Kong stock IPO market has continued to be sluggish, and how to lead the new market to recover in 2024 will be one of the main problems faced by Chen Yiting.
In September this year, Chan Yiting said that the Hong Kong Stock Exchange, as a super connector and gateway market connecting the East and the West, will continue to enhance market vitality through reform and innovation in the future, and welcomes more companies to list in Hong Kong.
Regarding the development trend of the Hong Kong market, Ernst & Young Greater China Listing Services Leader Ho Zhaofeng told the Times reporter that Hong Kong's capital market will still face multiple challenges in 2024, and factors such as weakening expectations of the global economy, geopolitics, and the Federal Reserve's interest rate hike may continue to affect Hong Kong, but the willingness of enterprises to issue and list in Hong Kong is still strong, coupled with the relative tightening of IPOs in Chinese mainland, some companies will turn to seek Hong Kong listing. In the future, Hong Kong's IPO activity will recover after the negative side decreases and the capital market gradually stabilizes.
How to promote the liquidity of the Hong Kong market is another major challenge faced by the new CEO.
Since the beginning of this year, the trading of the Hong Kong market has been relatively sluggish, causing market concerns and calling for a reduction in stamp duty to activate the market. On 29 August, the Hong Kong Special Administrative Region (HKSAR**) announced the establishment of a task force to conduct a comprehensive analysis of the factors affecting market liquidity and submit recommendations for improvement to the Chief Executive.
Hong Kong Chief Executive John Lee delivered the "Chief Executive's 2023 Policy Address" in October, which proposed a number of reform measures, including reducing the stamp duty, reviewing the bid-ask spread, reducing market information fees, reforming the GEM market, and promoting Hong Kong's **RMB-denominated transactions.
With effect from 17 November 2023, the stamp duty on ** transactions in the Hong Kong market will be increased from 013% will be charged in both directions, and will be reduced to 01% is charged in both directions.
Yan Zhaojun, a strategic analyst at Zhongtai International, told the Times Weekly reporter that the stamp duty is only back to the level that was not increased a few years ago, and it is not enough to boost the liquidity of the Hong Kong market, but also to reduce the number of shares bought and sold per lot, reduce the bid-ask spread, deepen the interconnection trading mechanism, the reform of the listing system, and the improvement of economic fundamentals.
I am honoured to be the next Group CEO of HKEX, having worked at HKEX twice and having been closely linked to the Exchange throughout my career. Chan said that as the focus of the world's development shifts to the East, technological progress changes the way we live and work, climate change and the fragile economic environment have become major challenges that everyone needs to tackle together, and the Hong Kong Stock Exchange still has huge opportunities. We look forward to working with the Board, the Management Committee and the entire HKEX team to capitalise on these opportunities."