Global finance chiefs to face tougher China questions at Hong Kong summit

Citadel Income Fund

03/11/2023 03:25

By Kane Wu and Scott Murdoch
       HONG KONG, Nov 3 (Reuters) - Global investment bank and
asset manager chiefs are reuniting in Hong Kong next week amid
geopolitical tensions and China's economic slowdown, seeking to
redefine their position in the world's second-largest economy
and its offshore financial hub.
    The Global Financial Leaders Investment Summit, a flagship
event hosted by the Hong Kong Monetary Authority, begins on
Monday with participants including Goldman Sachs  GS.N  Chief
Executive David Solomon, Morgan Stanley  MS.N  boss James
Gorman, Citigroup's  C.N  Jane Fraser, as well as HSBC's
 HSBA.L  Noel Quinn and Standard Chartered's  STAN.L  Bill
Winters.
    The heads of Blackstone Group, Carlyle Group, Citadel and
others will also speak at the event, which focuses on the main
theme of "living with complexity".
    The executives are coming to Hong Kong as the city has shed
hundreds of banking and asset management jobs because of the
slowdown in China dealmaking and the tightened regulatory grip
on the market since the inaugural summit last year. That meeting
was billed as Hong Kong's comeback as a global financial hub
following the disruptions of the COVID-19 pandemic.
    "The main question in the mind of everybody when they come
to Hong Kong is how is the Chinese economy performing and what
would be the swings coming from there," said Diana
Parusheva-Lowery, head of public policy and sustainable finance
at the Asia Securities Industry & Financial Markets Association
in Hong Kong.
    The Hong Kong Stock Exchange is only the 11th-largest venue
for initial public offerings this year, with merely $2.7 billion
raised through the third quarter, a shadow of its top position
in most of the last decade. The territory's assets under
management fell by 14% in 2022, official data showed. 
    Trading volumes have also slumped as foreign investors
reduce exposure to a China they view as increasingly isolated by
its opaque policies, struggling property sector and crackdowns
on private enterprise.
    "The structural slowdown in China's economy, the omnipresent
risk that U.S.-China relations might take another leg down in
the future, the questions about whether private mainland money
now prefers Singapore, none of that has really changed," said
Chris Beddor, Gavekal Dragonomics' deputy China research
director based in Hong Kong.
    "And senior people in the financial sector are keenly aware
of those issues, even if they don't discuss them publicly,"
Beddor said. 
        
    STRING OF LAYOFFS
    Hong Kong's financial job market, which saw an exodus of
foreign employees during COVID, is unlikely to recover in the
near term amid a challenging operating environment, recruiters
and industry insiders say. 
    Goldman Sachs, Morgan Stanley and J.P. Morgan have trimmed
dozens of bankers based in Hong Kong and mainland China this
year, with key China dealmakers among those laid off. 
    The surprise merger between Swiss banking rivals UBS and
Credit Suisse resulted in a brutal 80% reduction in the Credit
Suisse investment banking staff in Hong Kong in August. 
    Canada's largest pension fund CPP Investment also cut a
number of Hong Kong-based staff members.
    John Mullally, recruiter Robert Walters' Hong Kong managing
director, said hiring in private banking remains active, helped
by wealth coming out of China to Hong Kong after the border
reopened.
    Hong Kong needs to be aware of competition from rival
financial hub Singapore but Mullally expects Hong Kong to
"regain some of the ground lost" despite the depressed
dealmaking and trading.
    

 (Reporting by Kane Wu in Hong Kong and Scott Murdoch in Sydney;
additional reporting by Selena Li and Xie Yu; Editing by
Christian Schmollinger)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))