Update from Public-Sector-Land

To some commentators in Britain, Hong Kong Exchanges & Clearing’s takeover of the London Metal Exchange is part of a diabolical plot by Communist China to control or manipulate the world’s commodities markets. Or it is a last vestige of Victorian imperial might falling into the hands of the awakening Oriental superpower. At the very least, there is something unfair about it; while HKEx is free to buy the London company, the reverse would be impossible as the Hong Kong exchange is in practice run by the Hong Kong government and is off-limits.

Seen in a global context, it is yet another example of Asia buying up everything in the bankrupt West. From a regional point of view, the transaction means that Hong Kong has sprinted ahead in the race (apparently one is in progress) to become Asia’s number-one throbbing and dynamic commodities trading hub and overall international financial centre. Visionary leaders will be especially miffed in Singapore, whose stock exchange’s attempt to merge with its Australian counterpart was rejected last year by Canberra on grounds of national interest.

For us in Hong Kong, the response is more along the lines of “You paid how much?” GBP1.4 billion? For a company that made GBP7.7 million last year?

Like the MTR, the airport, the Mortgage Corporation, the panda bears of Ocean Park and even in many ways the Jockey Club, HKEx is one of those de-facto state entities inhabited by the finest minds Chief Executive Donald Tsang can find among his exclusive circle of favourite best friends. It is a milieu of bureaucrats, loyal businessmen and dependable hangers-on like the ubiquitous Ronald Arculli, self-important and basking in the greatness of their organisations as if government-granted monopolies, aid or protection had nothing to do with it.

HKEx’s people claim success in being the number-one centre for initial public offerings in the world every year. It would look better if Shenzhen weren’t in third position; with the listing of China Inc in full flow over the last few years, they couldn’t fail. Note how they can’t find a way of de-listing penny stocks, reducing trading spreads or sorting out their lunch arrangements. Since the Mainland IPOs won’t last forever, the HKEx folk have been scurrying around such benighted places as Mongolia and Kazakhstan in search of listings glory. Hugely over-paying for a trophy acquisition in London – being taken for a ride by the sellers, in other words – sounds all too possible. If the deal goes ahead (some concerned Brits are still worrying about corporate governance at HKEx, namely the technical possibility of Beijing’s interference via the Hong Kong government’s control), it will be something to remember the Friends-of-Donald old guard by in the years to come.

Not everyone is concerned about GBP1.4 billion. Over in another corner of quasi-public-sector-land, fury breaks out over 10 cents…

In other words, you pay 10 cents less if you pay cash to buy a ticket. The MTR PR person puts it down to ‘different methods used to calculate fares’. So when the MTR calculates its fares, it does so twice: once for passengers who pay cash and once for people who use an Octopus card. All is clear.

On an especially heart-warming note from the hard core of the public sector, the Hong Kong Police in Yuen Long are recruiting ethnic minorities to spread peace and love and understanding between majority residents and brown people (whites and Japanese are ‘expatriates’ and thus rich, law-abiding and unobjectionable)…

Who can fail to be impressed by such tolerance? Those bongo-banging Congolese who have become such a familiar feature of life in Hong Kong these days are loud. I look forward to other noise nuisances being dealt with the same way:

“I wish to complain about my neighbours drilling holes in their apartment wall/playing ear-splitting disco music/torturing cats at 2 am.”

“Thank you for your enquiry. Upon investigation we determine that your neighbours enjoy getting together and drilling holes in their apartment wall/playing ear-splitting disco music/torturing cats at 2 am.”

“Oh is that so? I never realized. That’s OK then – they’re welcome to carry right on. Good night.” 

Click to hear 'Bang the Drum All Day’ by Todd Rundgren!


This entry was posted in Blog. Bookmark the permalink.

9 Responses to Update from Public-Sector-Land

  1. Bela Lugosi says:

    It may be beau but it isn’t Pepys.

  2. Joe Blow says:

    did maugrim die ?

  3. maugrim says:

    No. Not much to say that Hemmers hasn’t allready said. As to the markets, sell in the next day or two. Longer term looks quite turbulent.

  4. Stephen says:

    HKEx had a cocktail party on Friday with guest of honour Chief Executive Donald. The thought of an evening with Charles, Ronald and Donald blathering platitudes to each other became intolerable so I went down the pub with the money I saved by not shopping at Watsons.

    In other news can anyone tell me whats so special about a late ’50’s office block formerly inhabited by Government which needs to be preserved at all cost ? Its hardly an f*cking Architectural gem is it !

  5. Vile says:

    “The old government place is a modernist masterpiece and an irreplaceable part of Hong Kong culture and history.”

    (Or not – but play along, or they’ll replace it with a 50-storey government-themed shopping mall and luxury residential development.)

  6. Probably says:

    I agree with Stephen on the architectural merits or otherwise of the “West Wing” (do our HK bureaucrats call it that to give them some Whitehouse type of ego boost?). The fear is though that whatever replaces it creates even worse congestion in the area – more than that generated daily by the tycoon wagons illegally parked on Queens Road opposite the Landmark Mandarin Oriental entrance.

    Why not just leave it there to fester for a few years as a memorial to bureaucratic ineptitude and disorder?

  7. paul says:

    Actually, the response to buying the London Exchange is more nuanced. The higher end newspapers suggest its a daft deal. Owning the exchange will provide the owners with very little, if any, control over raw material prices.

  8. The Regulator says:

    A Malaysian ship owner wanted to buy the Baltic Exchange so he could rig charter prices.

  9. Real Tax Payer says:

    Repeat advisory

    Read ” When China Rules the World” by Martin Jaques

    Yes I know he used to edit the workers’ daily , or whatever, until it closed down . So what ? Fault what he writes . Don’t fault the writer, please

    If have lived here for over 30 years ( as I have) and worked every weekday in China for the past 25 years ( as I have) you must be myopic not to see what China can do when the Chinese People finally Stand Up

    What China has done these past 30 years is nothing short of incredulous . The office I started 25 years for a German company was doing DM 20 Million per year ( what’s that in EURO or US$ ? US$10 Million ? ) . That has now grown to US$1 Billion business total business

    The little bit of that company’s China business which I took over in 2002 as an IPO has since grown 10 x in the past 10 years and already eclipses our European business where we have two of our factories, and China business will overtake our USA business ( where we have our biggest factory ) within the next 2 years

    I can only say that I am totally flabbergasted at what China has done these past 30 years, and also very proud of China, having married into the country and thrown my lot and everything besides into this country , of which we are now a part whether we like it or not ( one country / one system = WE WILL BEAT THE WORLD)

    Go on – shoot me down . But it will make no difference

    The world order will change in the next 20- 30 years and China will return to what it always was until the Brits started sailing abroad and drinking tea : The True Central Kingdom

    ‘Nuff said ( and anyway this was yesterday’s TBL so no-one is reading anymore )

Comments are closed.