h)ûHADûTOûADMITû)ûHADûBECOMEûAûLIGHTNINGûRODûû)ûDIDNTû
FEELûITûWASûAPPROPRIATEûANDû)ûDIDNTûFEELûITûWASûFAIRv
FORMER BARCLAYS BOSS BOB DIAMOND, P5
Bankers shrug off
Stock Connect tiff
"ANKERSûINû(ONGû+ONGûHAVEûSHRUGGEDûOFFûTHEû
SURPRISEûDECISIONûBYû#HINASûSTOCKû
EXCHANGESûTOûEXCLUDEûCOMPANIESûWITHûDUAL
class shares from the Shanghai and
3HENZHENû3TOCKû#ONNECTûSCHEMES
The announcement from the Shanghai
3TOCKû%XCHANGEûANDû3HENZHENû3TOCKû
%XCHANGEûLASTûWEEKûTRIGGEREDûHEAVYûSELLINGû
INû#HINESEûSMARTPHONEûMAKERûXIAOMI ûTHEû
lRSTûCOMPANYûTOûLISTûINû(ONGû+ONGûWITHûAû
dual-class structure.
8IAOMIûSHARESûDROPPEDûASûMUCHûASûûONû
-ONDAYûMORNING ûBUTûREGAINEDûGROUNDûLATERû
INûTHEûWEEKûAFTERûTHEû(ONGû+ONGûBOURSEûSAIDû
it had reached an agreement with its
COUNTERPARTSûINû#HINAûONûAûWAYûFORWARD
That added to a tumultuous debut for
8IAOMI ûWHICHûREVERSEDûlRST
DAYûLOSSESûONû*ULYû
ûTOûGAINûûINûITSûlRSTûWEEKûOFûTRADING ûINû
part because of its fast-track inclusion into the
BENCHMARKû(ANGû3ENGûINDEX ûAûPRE
REQUISITEû
FORûADMISSIONûTOûTHEû3TOCKû#ONNECTûLINKS
"ANKERS ûHOWEVER ûSAIDûTHEYûDIDûNOTû
EXPECTûTHEûDECISIONûTOûHAVEûMUCHûOFûANû
impact on upcoming deals.
“It was maybe a bit of a shock initially
since the assumption was that anything in
THEû(ANGû3ENGûINDEXûWOULDûAUTOMATICALLYû
BEûAVAILABLEûTHROUGHû3TOCKû#ONNECT vûSAIDû
ONEû%#-ûBANKER
h"UTû)ûDONTûTHINKûITûCHANGESûANYTHINGûATû
ALLû4HEûPRIMARYûOBJECTIVEûWHENûDOINGûAû$#3û
LISTINGûINû(ONGû+ONGûISNTûTOûGETûACCESSûTOû
MAINLANDûINVESTORSûTHROUGHû3TOCKû#ONNECTv
“It may change the aftermarket trading
PATTERNûORûDEMANDûCURVEûSLIGHTLY ûBUTûOTHERûTHANû
THAT ûTHEREûISûNOûMATERIALûCHANGEûTHATû)ûCANûSEEv
SIMILAR INVESTORS
8IAOMIûRAISEDû(+BNû53BN ûFROMû
ITSû)0/ûEARLIERûTHISûMONTHûINûTHEûCITYSûlRSTû
LISTINGûWITHû$#3ûFOLLOWINGûAûRULEûCHANGEûINû
!PRILûDESIGNEDûTOûWOOûMOREûhINNOVATIVEvû
COMPANIESûTOûTHEûEXCHANGE
,ASTûMONTH ûMEITUAN-DIANPING ûAû#HINESEû
ONLINEûFOODûDELIVERY
TO
TICKETINGûSERVICESû
PROVIDER ûANDûONLINEûSTEELûMARKETPLACEû
ZHAOGANG.COMûBOTHûlLEDûTOûLISTûWITHû$#3û
3EVERALûOTHERûCOMPANIESûAREûEXPECTEDûTOû
follow suit.
The reforms also allow dual-class
COMPANIESûALREADYûLISTEDûONûTHEû.EWû9ORKû
3TOCKû%XCHANGE û.ASDAQûORûTHEûPREMIUMû
LISTINGûSEGMENTûOFûTHEû,ONDONû3TOCKû
%XCHANGEûTOûPURSUEûAûSECONDARYûLISTINGûINû
(ONGû+ONG
"ANKERSûSAIDûTHEûANNOUNCEMENTûBYûTHEû33%û
ANDûTHEû3:3%ûMAYûDETERûCOMPANIESûALREADYûLISTEDû
INûTHEû53ûFROMûISSUINGûMOREûSHARESûINû(ONGû+ONG û
although they said the effects would be minimal.
h4HEûDIFFERENCEûFROMûAûLISTINGûPERSPECTIVEû
BETWEENû(ONGû+ONGûANDûTHEû53ûISûMINIMAL vû
SAIDûONEû%#-ûBANKERûh4HEYREûBOTHû
COMPRISEDûOFûAûSIMILARûGROUPûOFûLARGE û
SOPHISTICATEDûINSTITUTIONALûINVESTORSv
h)FûYOUREûALREADYûLISTEDûINû.EWû9ORKûANDû
you decide to do a secondary listing in Hong
+ONG ûTHEREûISûAûSTRONGERûMOTIVATIONûTOûTAPû
MAINLANDû#HINESEûMONEYûINûORDERûTOû
DIVERSIFYûYOURûINVESTORûBASEv
h!LTHOUGH ûPERSONALLY û)ûHAVENTûHEARDûOFû
ANYûDEALSûBEINGûPULLEDûASûAûRESULTûOFûTHISvCDR COMPETITION
4HEû#HINESEûEXCHANGESûCITEDûINVESTORû
PROTECTIONûASûTHEûREASONûFORûTHEûEXCLUSION û
which also applies to foreign companies and
stapled securities. They said that it was too
early to add stocks with new structures to
THEû3TOCKû#ONNECTûSCHEMES
“Dual-class shares are a new product in
(ONGû+ONG vûTHEûEXCHANGESûSAIDûINûAûJOINTû
statement. “We should wait until these types
OFûSECURITIESûREACHûAûCERTAINûQUANTITYûANDûAû
market operation basis before considering
ALLOWINGûDOMESTICûINVESTORSûTOûPARTICIPATEv
HONG KONG EXCHANGES AND CLEARING reacted
QUICKLYûTOûDEFENDûTHEûNEWûFORMATûANDûCALLEDû
for the new securities to be included “as
SOONûASûPOSSIBLEv
4HEû(ONGû+ONGûEXCHANGEûANNOUNCEDûITûHADû
hREACHEDûAûCONSENSUSvûWITHûITSûCOUNTERPARTSûINû
#HINAûOVERûTHEûINCLUSIONûOFûCOMPANIESûWITHû
$#3ûINûTHEû3TOCKû#ONNECTûSCHEMES
(+%XûSAIDûTHEûEXCHANGESûWOULDûSETûUPûAû
working group to look at the inclusion of
COMPANIESûWITHû$#3ûGIVENûTHATûINVESTORSûINû
#HINAûWEREûhNOTûYETûFAMILIARvûWITHûTHEûSTRUCTURE
)TûALSOûSAID ûWITHOUTûPROVIDINGûFURTHERû
DETAILS ûTHATûTHEREûWOULDûBEûhANûINITIALû
SPECIALûSTABILITYûTRADINGûPERIODvûFORû
COMPANIESûWITHûWEIGHTEDûVOTINGûRIGHTSû
BEFOREûTHEYûWOULDûBEûAVAILABLEûFORûTRADINGû
VIAûEITHERû3TOCKû#ONNECTûSCHEME
3HARESûINû8IAOMIûROSEûMOREûTHANûûONûTHEû
BACKûOFû(+%XSûSTATEMENT ûALTHOUGHûSOMEû
INVESTORSûEXPRESSEDûCONCERNûABOUTûITSûVAGUEû
WORDINGû3EVERALûSOURCESûSAIDûTHATûTHEû#HINESEû
authorities were looking to use inclusion in
3TOCKû#ONNECTûASûAûCARROTûTOûENCOURAGEû
COMPANIESûTOûISSUEû#HINAûDEPOSITARYûRECEIPTS
Thomas BlottFRENCH CONNECTION
Two former French derivatives traders, including
a one-time star banker at Deutsche Bank, were
handed jail terms totalling more than 13 years by
a London court last week for plotting to rig global
Euribor interest rates.
Christian Bittar, 46, was sentenced to five years
and four months after pleading guilty in March.
Former Barclays trader Philippe Moryoussef
was sentenced to eight years. He was tried in his
absence after fleeing to France when Bittar’s plea
was made public.
The two men were charged with conspiring
to manipulate the Euro interbank offered rate
(Euribor), which helps determine rates on more
than $150trn of financial contracts and loans
worldwide, between January 2005 and December- Judge Michael Gledhill said it was “beyond
irony” that Bittar, who earned nearly £60m
(US$78m) during the indictment period - most
of it legitimately - needed to resort to dishonest
manipulation.
“Derivatives trading is often said to be a form of
betting,” he said. “You took the analogy one step
further, by loading the dice.”
NEW SUPERVISOR
The European Central Bank has advertised for a
new bank supervisory chief, looking for an expert
to oversee a sector still weighed down by bad
loans and weak profitability following the bloc’s
debt crisis. The job ad published on the ECB
website last week formally launches the process
to replace France’s Daniele Nouy, whose five-year
term ends on December 31.
While no candidate has formally expressed
interest, media reports have mentioned European
Banking Authority Chair Andrea Enria, ECB
supervisor Ignazio Angeloni, Central Bank of
Ireland Deputy Governor Sharon Donnery and
former Dutch supervisor Jan Sijbrand among
potential candidates.CASHES IN
UniCredit said on Friday the European Banking
Authority had rejected a request by Caius Capital
to look into complex financial instruments the
hedge fund says are wrongly included in the
Italian bank’s capital. Caius had asked the EBA to
open an investigation into €2.98bn (US$3.5bn) of
convertible and subordinated hybrid equity-linked
securities, known as CASHES, which UniCredit
issued in 2008.
UniCredit said the EBA had confirmed its
position taken in 2012, when the bank had
restructured the securities according to the EBA’s
guidelines.
“UniCredit has notified competent market
authorities of Caius Capital’s actions in light of
possible market abuse,” the bank said. IN BRIEF