HKEX chief to step down months earlier than planned

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Nicolas Aguzin, the outgoing chief executive of Hong Kong Exchanges & Clearing, will depart months earlier than planned, as the stock exchange grapples with low trading activity and a dearth of initial public offerings from China.

The early exit by the bourse’s chief executive, announced on Friday, and on the eve of the exchange’s closure for the Chinese new year holiday, will come as Hong Kong fights to maintain its status as a major financial centre.

Global investors have increasingly turned away from the Chinese listings that dominate the city’s stock market, thanks in large part to an economic slowdown in the mainland and worsening tensions between Washington and Beijing.

Aguzin, who had been slated to step down at the end of his current three-year term on May 23, said in a statement that the leadership handover to incoming chief executive Bonnie Chan had been “going extremely well” and he had “therefore decided to fully hand over the role of CEO as of 1 March to my successor”.

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The tenure of Aguzin, a former star banker from JPMorgan who is known as “Gucho”, began in mid-2021, just weeks before a regulatory crackdown on China’s tech sector throttled Hong Kong’s once-lucrative trade in offshore IPOs by fast-growing Chinese start-ups.

Global investors’ aversion to the Chinese stocks that make up the bulk of Hong Kong’s market has only increased since then, thanks to China’s slowing economic growth, a liquidity crisis in the country’s property sector and the rising geopolitical tensions.

Last year, companies raised just $5.7bn from IPOs in the city, the smallest annual haul in more than two decades, according to Dealogic data.

Column chart of Funds raised from IPOs (US$bn) showing Hong Kong's listings haul fell to a two-decade low in 2023

Nor is there any sign of a pick-up in deal flow, with funds raised by listings so far this year totalling less than $280mn, down almost a fifth from the same period in 2023.

Trading activity has also slumped, prompting the city’s government to convene a special task force last year to deliver recommendations on how to improve market liquidity to Hong Kong’s chief executive. But there has been no major increase in trading, despite a string of supportive policy measures, including a cut to the stamp duty levied on stock trades.

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Last month, Michael Zhang, an analyst at Citigroup, cut the bank’s price target for HKEX shares by more than 10 per cent to HK$240. He also warned that average daily turnover in Hong Kong’s stock market had remained low in the new year, “suggesting risk for further earnings cut”.

Shares in HKEX were down almost 10 per cent year to date at market close on Friday ahead of the announcement, and have fallen 43 per cent since Aguzin’s term began.

Chan, the incoming chief executive, is a Harvard-educated lawyer who has served as co-chief operating officer since January of last year, responsible for areas including “mainland development” and strategy.