Funereal keening and the wringing of hands are in evidence in Hong Kong this morning as trouble-making lawmakers and journalists criticize the government for ‘allowing’ a locally owned company to spin off some of its assets through a listing in – horror of horrors – Singapore.
In brief: Li Ka-shing’s Hutchison Whampoa is to float its Hong Kong/Shenzhen container terminals in Singapore in the form of a trust. If it goes ahead, it will be the biggest ever IPO in the plucky little Lion City and quite possibly the biggest in Asia this year. This means that the Big Lychee’s total IPOs for this year will be some US$6 billion lower and Singapore’s US$6 billion higher, imperiling Hong Kong’s status as global number one. This in turns means that it is the end of the world and everyone’s penis is going to drop off and we are doomed.
Hong Kong’s officials are guilty of much, from colluding with tycoons to screwing up basic planning to simply being arrogant and irritating. But to ‘blame’ them because company A lists in market X instead of Y is silly. Hutchison is listing its ports in Singapore because the Hong Kong stock exchange does not accommodate the business trust structure of the planned new entity.
Maybe it should. Maybe the yes-men the government appoints to run HKEx should be given smacked bottoms and sent to bed with no supper for being dilatory and too smug about having giant Mainland IPOs handed to them on a plate. Or maybe business trusts have something undesirable, grubby or risky about them compared with proper incorporated companies, and a classy place like Hong Kong is above them and happy to leave them to desperate losers like Singapore. That’s not the point. The fact is that up until yesterday the editorial writers and legislators did not seem at all worried that Hong Kong’s regulatory environment did not allow such listings. The critics are therefore to some extent opportunistic bullies, albeit ones whose intended victims deserve no sympathy.
So the interesting question now is how the officials will react. It would be in character for Hong Kong bureaucrats under fire in circumstances like this to get whiny and defensive; to exhibit signs of poor self-esteem, low coping skills and abandonment in early childhood; and to implicitly accept their assailants’ basic premise that we are supposed to give a damn about either Hutchison or Lee Kuan Yew’s bizarre family sheep-farm-as-country experiment, Singapore.
How refreshing it would be if officials like Financial Services bosses Caejar Chan and his sidekick Au King-chi (at last – an excuse to use her photo) were to take the other tack. Among the points they could make would be:
- The Singapore stock exchange is a pathetic, Shanghai-type backwater and we are very happy to see them get a taste of real, grown-up action at last [slight sneer].
- We have heard a few malicious people suggest that an IPO of this size may be too much for Singapore to handle – after all, this exceeds all the capital they raised last year – but we’re sure they’ll manage it at the end of the day [barely disguised chortle].
- Who cares if it’s a bit of Li Ka-shing’s empire? Maybe if Hutchison hadn’t screwed up by pouring money into 3G mobile phones on the assumption it was another licence to gouge big profits, they wouldn’t need to do this [nonchalant shrug].
- Also, don’t forget that these ports are a fading industry. Li wouldn’t sell if they had a big future, and only suckers are going to buy this stuff – it’s future Pearl River Delta rustbelt [moderate smirk].
- Yes, obviously we should embrace dark pools, lunchtime trading and any other innovations that benefit Hong Kong as a whole but might upset certain vested interests, and from today onwards anyone caught resisting such measures will be chopped up and fed to pigs [menacing glare, wave shiny meat cleaver around].
The Legislative Council interrogation of officials on the great Hutchison Ports Singapore Listing Disaster of 2011 is a few weeks away, so plenty of evenings to prepare. There’s always a first time.