Daily Dispatches - Hong Kong should benefit from competition with Shanghai

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Despite concerns that Hong Kong's status as a regional banking hub is under threat by China's investment in the development of new finance hubs, such as that expected to be launched in Shanghai's free trade zone at the end of the month, others believe that it  will grow the pie and ultimately help rather than hinder Hong Kong.

Asian Business & Finance reports that a note from Barclays says that Hong Kong, which is currently the largest offshore RMB centre, has been subject to a lot of competition in Asia, particularly from Singapore and Taiwan. And now the Shanghai Free Trade Zone has been added as  another potential threat. Nonetheless, Barclays believes that the whole offshore RMB pool and trade will continue to grow over time.

"As the pie gets bigger, all RMB centres, including Hong Kong, should benefit. Currently, RMB deposits in Hong Kong account for less than 0.7% of China’s deposits; RMB trade settlements in Hong Kong accounts for about 14% of China’s trade and is still growing. Hong Kong banks, which operate in free markets, have survived and thrived and will surely adapt to the emergence of another financial centre."


Alibaba boss bashes Hong Kong exchange

Bloomberg reports that Alibaba's executive vice chairman Joseph Tsai said the failure of plans to list in Hong Kong shows the bourse should “adapt to future trends and changes.”

While Hong Kong was the first choice for an initial public offering, Alibaba couldn’t proceed because the exchange wouldn’t accept a company proposal to let its partners nominate a majority of the board, Tsai said.

The Fin“We are deeply aware of the disruption that is brought about by the Internet across all industries, and the capital markets are not exempt from this disruption.The question Hong Kong must address is whether it is ready to look forward as the rest of the world passes it by,” Tsai said.

Investment banks have valued China’s largest e-commerce company at $120 billion, which would make it the third-biggest Internet company after Google Inc. and Amazon.com Inc.

BoCom plans new operation in Shanghai free trade zone

Bank of Communications Co., China’s fifth-largest lender, plans to set up a branch and transportation leasing unit in Shanghai’s free trade zone as part of a proposal to provide financial services in the area, according to Bloomberg..

The lender will upgrade existing outlets in the 29 square-kilometer (11 square-mile) zone to a high-level branch receiving direct support from the bank.

The zone, set to open next week, may liberalise interest rates, allow freer yuan convertibility and relax foreign investment restrictions. BoCom, is also studying plans to offer investment products in the area.

Asian analysts tops

The Financial Times says Asian analysts beat their peers in Europe and the US on the success of their recommendations, according to the world’s second-biggest hedge fund.

Research by Man Group, covering more than 35,000 different buy or sell ratings, found that buy recommendations of Asia-based analysts outperformed benchmarks by an average of 4.3% in the 100 days after they were made.In comparison, UK, European and US analysts’ recommendations managed 1.5 &.

In the four years to 2008, their buy recommendations outperformed by 3% over 100 days, compared to less than 1% for US analysts’ picks and a loss of 0.5% for UK analysts. In the four years since, however, Asian analysts’ buy recommendations have outperformed by an average of 5.5$.

Aussie companies lagging in senior female hires

The Sydney Morning Herald reports that only eight percent  of Australia's biggest companies have a clear plan to improve the number of women in senior roles.

Advocacy group Women On Boards says Australian companies needed to more rigorously set, pursue and meet their own targets to raise female participation rates.

"Otherwise, companies will be relying on hope for improved diversity," chairman Ruth Medd said.

A new report by the group found just 16 of the companies in the share market's top 200 companies have a comprehensive strategy to ensure gender balance in their workplace.

Altius plans Singapore expansion

Private equity company Altius Associates is planning to expand its operation in Singapore pending regulatory approval, according to a report in AsianInvestor. Once it gets the nod from the regulators, the Lion City branch of the international firm will be built out into a full investment advisory and business development operation.

Former Deutsche Bank executive Peter Pfister has been brought on board to spearhead the expansion. He will evaluate plans to increase headcount from the current five once he has been in office for about six months.

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