IFR Asia - October 14, 2017

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Two front runners to head PBoC

#HINASûTOPûBANKINGûREGULATORû'UOû3HUQINGû
and veteran banker Jiang Chaoliang are
FRONTûRUNNERSûTOûSUCCEEDû:HOUû8IAOCHUAN û
the country’s longest-serving central bank
HEADûWHOûISûLIKELYûTOûSTEPûDOWNûNEXTûYEAR û
ACCORDINGûTOûMULTIPLEûSOURCESûFAMILIARûWITHû
THEûMATTER
4HEû
YEAR
OLDû:HOUûHASûSPEARHEADEDû
lNANCIALûREFORMSûANDûBOOSTEDûTHEû
RENMINBISûGLOBALûCLOUT ûASûWELLûASû
THE0EOPLESû"ANKûOFû#HINASûPOLICYû
INmUENCE ûSINCEûTAKINGûUPûHISûPOSTûINû
:HOUûISûLIKELYûTOûRETIREûAROUNDûTHEûTIMEû
OFûTHEûANNUALûSESSIONûOFûPARLIAMENTûNEXTû
March, according to the seven sources
WITHûTIESûTOûTHEûLEADERSHIPûANDûCLOSEûTOûTHEû
central bank.
'UO ûCHAIRMANûOFûTHEû#HINAû"ANKINGû
2EGULATORYû#OMMISSION ûWHOSEûRICHû
EXPERIENCEûANDûREFORMISTûCREDENTIALSûAREû
SIMILARûTOû:HOUS ûISûSEENûASûMOREûQUALIlEDû
FORûTHEûJOB ûTHEûSOURCESûSAID
(OWEVER û*IANG ûTHEû#OMMUNISTû0ARTYû
CHIEFûOFû(UBEIûPROVINCE ûHASûTHEûBACKINGû
OFûSOMEûTOPûLEADERSûANDûISûSEENûASûHAVINGû
AûROUGHLYûEQUALûCHANCEûOFûGETTINGûTHEûPOST û
they noted.
4HEû0"O#ûANDûTHEû#"2#ûDIDûNOTûRESPONDû
TOû2EUTERSûREQUESTSûFORûCOMMENT ûWHILEû
OFlCIALSûATû(UBEIû#OMMUNISTû0ARTYû
COMMITTEESûPROPAGANDAûDEPARTMENTû
DECLINEDûTOûCOMMENT

9Iû'ANGûûAû0"O#ûVICE

GOVERNORûWHOû

HASûAû0H$ûINûECONOMICSûFROMûTHEû5NIVERSITYû

of Illinois, is the leading in-house candidate

TOûREPLACEû:HOUûBUTûISûNOTûSEENûASûAû

frontrunner.

/NEûOFûTHEûSOURCESûWHOûCORRECTLYû

PREDICTEDûAûRESHUFmEûOFûTHEûCOUNTRYSû

TOPûBANKINGûSECURITIESûANDûINSURANCEû

REGULATORSûINûûSAIDûTHATû'UOûISûMOSTû

FAVOUREDûHELPEDûBYûHISûUNDERSTANDINGû

OFûTHEûlNANCIALûMARKETSûANDûTHEûGLOBALû

ECONOMY

h(ISûAPPOINTMENTûWOULDûBOOSTû

CONlDENCEvûTHEûSOURCEûADDED

'UOûûWASûSUMMONEDûBACKûTOû"EIJINGû

INû&EBRUARYûTOûLEADûTHEû#"2#ûAFTERûSERVINGû

ASûGOVERNORûOFû3HANDONGûPROVINCEûFORû

FOURûYEARSûnûHISûSECONDûREGIONALûSTINTûAFTERû

SERVINGûASûAûDEPUTYûGOVERNORûOFû'UIZHOUû

PROVINCEûINûTHEûLATEûS

5NDERû'UOSûLEADERSHIPûEARLIERûTHISûYEARû

the CBRC started what was widely dubbed

AûhREGULATORYûWINDSTORMvûTOûFORCEûBANKSû

TOûCUTûDEBTûBUTûHEûLATERûEASEDûUPûAFTERûTHEû

MOVEûFUELLEDûFEARSûOFûAûLIQUIDITYûCRUNCH

'UOûAûPHILOSOPHYûMAJORûANDûONCEûAû

VISITINGûSCHOLARûATû/XFORDû5NIVERSITYûHASû

SERVEDûASûAûDEPUTYûCENTRALûBANKûGOVERNORû

ANDûASûTHEûTOPûFOREIGNûEXCHANGEûREGULATORû

and steered China Construction Bank

TOûAûSUCCESSFULûSHAREûLISTINGû!SûAûTOPû

STOCKûMARKETûREGULATORû'UOûCEMENTEDûAû

REPUTATIONûASûANûECONOMICûREFORMER

3TILLû*IANGûWHOûHASûALSOûALTERNATEDû

BETWEENûTOPûlNANCIALûANDûPROVINCIALûPOSTSû

REMAINSûAûFORMIDABLEûCHALLENGERûFORû'UOû

the sources said.

4HEû

YEAR

OLDû(UBEIûPARTYûCHIEFûWHOû

has had stints as an assistant central bank

GOVERNORûANDûHEADûOFû#HINAû$EVELOPMENTû

"ANKûTHEûCOUNTRYSûLARGESTûPOLICYûBANKû

EMERGEDûASûAûPOSSIBLEûSUCCESSORûTOû:HOUû

relatively recently.

*IANGûHASûBEENûCREDITEDûWITHûHELPINGû

TOûTRANSFORMûTHEûSTATE

OWNEDû"ANKûOFû

#OMMUNICATIONSûWHICHûHADûBEENûPLAGUEDû

by bad debt, into a bank with a stronger

balance sheet that then listed in Hong Kong

ANDû3HANGHAI

h*IANGûISûNOTûAûDARKûHORSEûHISûRESUMEûISû

VERYûGOODûANDûHEûHASûBEENûPROVEDûTOûBEû

VERYûCAPABLEvûSAIDûONEûOFûTHEûSOURCES

7HOEVERûTAKESûTHEûHELMûOFûTHEûCENTRALû

bank will face tough challenges as he will

HAVEûTOûWALKûAûTIGHTROPEûBETWEENûENSURINGû

ECONOMICûSTABILITYûANDûPUSHINGûREFORMSûTOû

rein in debt risks.

h)NûTERMSûOFûINTERNATIONALûINVESTORSû

'UOûMAYûOFFERûMOREûCONTINUITYvûSAIDû2OBû

3UBBARAMANû.OMURASûCHIEFûECONOMISTû

ANDûHEADûOFûGLOBALûMARKETSûRESEARCHûFORû

!SIA

EX

*APAN

:HOUûSTAYEDûONûPASTûRETIREMENTûAGEûAFTERû

HEûWASûAPPOINTEDûAûVICEûCHAIRMANûOFûTHEû

TOPûADVISORYûBODYûTOûPARLIAMENTûINûûAû

MOVEûTHATûMADEûHIMûAûNATIONALûL

KEVIN YAO, BENJAMIN KANG LIM

Citigroup mulls

China cash

equities business

CITIGROUPûISûCONSIDERINGûSETTINGûUPûANû
onshore cash equities business in China
ANDûEXPANDINGûRESEARCHûCOVERAGEûOFû
MAINLANDûSTOCKSûTOûBOOSTûITSûSHAREûOFûTHEû
business in Asia, the head of its regional
equities unit has said.
4HEû53
HEADQUARTEREDûBANKûISûALSOûLOOKINGû
TOûADDûTOûITSû!SIAûEQUITIESûUNITûATûLEASTûû
PEOPLE ûINCLUDINGûBANKERSûANDûTECHNOLOGYû
STAFF ûMAINLYûATûITSû(ONGû+ONGûANDû3INGAPOREû
hubs, Richard Heyes has told Reuters.
#ITIGROUPSûSHARPENEDûFOCUSûONûTHEû
business, including stock trading and
RESEARCH ûASûPARTûOFûITSûGLOBALûEFFORTûTOûBOLSTERû
trading technology, hire senior bankers and
BOOSTûlNANCINGûTOûHEDGEûFUNDS
h)TSûANûINTERESTINGûOPPORTUNITYûONEû
WEûAREûLOOKINGûATûVERYûCLOSELY vû(EYESû

SAIDûREFERRINGûTOûTHEûESTABLISHMENTûOFûANû

onshore cash equities business in China,

which was in its early stages. He declined to

give details.

h!TûTHEûMOMENTûWEûDONTûFEELûWEûHAVEû

AûCOMPETITIVEûDISADVANTAGEûDOINGûITûFROMû

(ONGû+ONGûINûTHEûWAYûTHEûMAJORITYûOFû

PEOPLEûDOûBUTûOVERûTIMEûDOû)ûTHINKûWEû

should strongly think about on-ground

PRESENCEû9ESv

Analysts said China-listed shares’

INCLUSIONûINû-3#)SûEMERGING

MARKETSû

BENCHMARKûTHISûYEARûAûMILESTONEûFORûGLOBALû

INVESTINGûWOULDûLEADûTOûAûJUMPûINûDEMANDû

for brokerage and research services.

4HATûCAMEûONûTOPûOFûTWO

WAYûTRADINGû

LINKSûBETWEENûSTOCKûMARKETSûINû(ONGû+ONGû

ANDû3HANGHAIûANDû3HENZHENûASûPARTûOFû

#HINASûEFFORTSûTOûOPENûUPûCAPITALûMARKETS

#HINASûBROKERAGEûREVENUEûPOOLûTOUCHEDû

53BNûINûûACCORDINGûTOûLASTûYEARSû

REPORTûFROMû1UINLANûû!SSOCIATES

!SSUMINGûINSTITUTIONALûBROKINGûREVENUEû

ISû

ûOFûTHEûTOTALûAûûMARKETûSHAREû

WILLûBRINGû53MûTOû53MûINûANNUALû

revenue to an equities house in the world’s

SECOND

LARGESTûECONOMYûTHEûCONSULTANCYSû

REPORTûSAYS

4OûTAPûINTOûANûEXPECTEDûDEMANDûSURGEû

#ITIGROUPûWHICHûPROVIDESûRESEARCHûONû

û#HINA

LISTEDûlRMSûPLANSûTOûINCREASEû

COVERAGEûTOûûBYûYEAR

ENDûANDûûINûTHEû

LONGERûTERMû(EYESûHASûSAID

“We have seen very clearly, as one of

THEûBIGGESTûPLAYERSûINûTHEû(ONGû+ONGû

STOCK   ûCONNECTûAûVERYûSIGNIlCANTûRAMP

UPû

INûTHEûOPENINGûOFûACCOUNTSû)TSûVERYûCLEARû

THATûMANYûPEOPLEûAREûGETTINGûPREPAREDûFORû

FUTUREûACTIVITYûINûTHEû#HINAûMARKETv

#ITIGROUPûISûALSOûLOOKINGûTOûBOLSTERû

lNANCINGûSUPPORTûFORûHEDGEûFUNDSûTOûHELPû

WINûMOREûTRADINGûBUSINESSûANDûBOOSTûITSû

!SIAûEQUITIESûMARKETûSHARE

h7EûHAVEûHADûVERYûMEANINGFULûSUCCESSû

WITHûSOMEûVERYûIMPORTANTûLARGEûGLOBALû

HEDGEûFUNDSûINûTHEû53û7EûAREûNOWû

EXPECTINGûORûHAVEûCOMMITMENTSûFROMû

MANYûOFûTHEMûTOûON

BOARDûUSûINû!SIAûEITHERû

BYûENDûOFûTHISûYEARûORûEARLYûNEXTûYEARv

SUMEET CHATTERJEE