Rob Morrison says Hong Kong's bureaucracy has driven CLSA to pick Singapore for expansion.
Hong Kong is too complacent about its cosy status as the financial gateway to the mainland and faces plunging into obscurity if Shanghai becomes the mainland’s leading capital market, a senior local banker says.
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CLSA chief slams HK’s complacency, red tape
Naomi Rovnick
25 June 2009
Hong Kong is too complacent about its cosy status as the financial gateway to the mainland and faces plunging into obscurity if Shanghai becomes the mainland’s leading capital market, a senior local banker says.
Rob Morrison, who retires next week as chairman of Asian stockbroker CLSA, fired this warning shot at Hong Kong before leaving his post.
CLSA, with 18 offices worldwide, was founded in the city in 1987.
Mr. Morrison said the Hong Kong government did not try hard enough to keep financial services businesses on side, and the city’s legendary bureaucracy had made CLSA choose Singapore for expansion.
“A number of the things that have worked well for Hong Kong have worked not because Hong Kong has done anything special but because the city has sat there as a conduit for investment into China,” he said.
Hong Kong benefits because mainland companies wanting to raise cash from foreign investors cannot do so in Shanghai. The yuan is not fully convertible yet.
Many global banks have based their Asian headquarters here to sell mainland firms’ Hong Kong-listed shares.
In March, the State Council announced Shanghai would become a major financial centre by 2020.
Mr. Morrison predicted Beijing would let the yuan float freely within a decade. “When that happens, Hong Kong will have to work hard to reinvent itself and establish why companies should use Hong Kong as a capital-raising centre.”
CLSA runs Asia’s biggest investor forum in Hong Kong. Money managers and companies flock to the popular annual event from all over the world.
“We have had other Asian countries offer us cash to take the conference to them. We’ve never got a dollar of funding from the Hong Kong government,” Mr. Morrison said.
CLSA has expanded faster in Singapore than in Hong Kong.
It has 366 Hong Kong staff, up from 253 in 1999. There are 278 staff on its Singapore payroll, compared with only 54 in 1999.
Mr. Morrison said it was easier to launch new financial services and products in Singapore than here. CLSA has launched new trading businesses there in the past two years.
“Hong Kong has to take a long, hard look at itself in terms of the red tape,” he said.
Singapore came fifth in the World Economic Forum’s global competitiveness report this year. Hong Kong trailed at No 11.
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