Breakingviews

Weaker shareholder rights a bad omen for Hong Kong

June 22, 2015

Ditching its “one share, one vote” rule may help the stock exchange lure listings from New York – or Shanghai. But Hong Kong’s standards are already under pressure as China’s capital markets opens up. The willingness to sacrifice long-held principles bodes ill for future reform.

Jack Ma turns Reorient into free-money factory

June 1, 2015

The Alibaba founder’s fund is among investors taking control of the Hong Kong investment firm. Though their plans are vague, the shares promptly soared, handing the new owners a $5 billion-plus paper gain. It’s another example of Ma’s involvement creating value from thin air.

China’s margin trading boom nears its limits

May 27, 2015

Investors have pumped up mainland stock markets with more than $300 bln of borrowed money, prompting brokers to scramble for extra capital. But leverage is already high, while the number of eligible new customers is finite. Securities firms need more durable sources of income.

Mystery sell-offs test Hong Kong at crucial point

May 21, 2015

Regulators are probing Hanergy, whose $40 bln value halved in a morning. Two once-hot stocks backed by Goldin Group have also plunged. Hong Kong wants to act as a gateway to China for global investors. So maintaining a transparent, orderly market is more important than ever.

HSBC in 2020: An imagined letter to shareholders

May 15, 2015

Moving its head office to Shanghai marks a new era for the bank, writes chairman Hank Paulson in a make-believe memo. However, despite escaping hostile regulators in the aftermath of Britain’s divorce from the European Union, HSBC faces many challenges, both familiar and new.

HSBC revival overshadowed by existential questions

May 5, 2015

Better investment banking revenue and fewer bad loans boosted the $194 bln bank’s quarterly results. That’s a welcome respite from the Swiss tax furore. Still, long-term fortunes rest on decisions about its shape, head office location and UK business. None will be resolved soon.

Hong Kong stock boomlet tests China’s capital dam

April 9, 2015

A trickle of Chinese money pouring into Hong Kong stocks via a new trading link has turned into a flood. The arrival of mutual funds is a factor, but a bigger one is speculation on the wall of money bursting to get out of the mainland. The dam is sturdy, but pressure is building.

Why silencing short-sellers is futile

April 8, 2015

Asian companies and regulators are coming down hard on authors of negative research reports. Though it’s possible to track down even anonymous assailants, it’s tougher to prove the attacks were wrong or reckless. Executives have little choice but to face up to their critics.

Review: Building HSBC’s sprawling, flawed empire

February 27, 2015

The Hong Kong bank grew into one of the world’s biggest financial institutions. But poor results and a furore over Swiss tax make for an unhappy 150th anniversary. A new history shows how hands-off management and breakneck M&A under former chairman John Bond are partly to blame.

HSBC’s operating woes trump Swiss tax furore

February 23, 2015

CEO Stuart Gulliver’s offshore accounts bring new scrutiny of past fiscal fiddles. They also raise the bar for future good behaviour. The main concern for investors, though, is the bank’s lacklustre financial performance. Even a reduced 10 percent ROE target is some way off.