Deal­maker ‘queen’ makes her mark

Se­cu­ri­ties house boss Pollyanna Chu says be­ing HK’s rich­est woman isn’t ev­ery­thing to her. She tells she’ll work even harder to re­pay so­ci­ety.

China Daily (Hong Kong) - - HK | BUSINESS - Con­tact the writer at tingduan@chi­nadai­lyhk.com

Sit­ting on a colos­sal per­sonal for­tune es­ti­mated at big­ger than Don­ald Trump’s is no small deal even to busi­ness big­wigs, let alone the or­di­nary folk. But, to Pollyanna Chu Li Yuet-wah, it still seems there’s noth­ing much to trum­pet about.

Chu — one of Hong Kong’s most em­i­nent deal­mak­ing en­trepreneurs — sticks to a rig­or­ous phi­los­o­phy in life, es­chew­ing ex­trav­a­gance and os­ten­ta­tious­ness, adamant that life must go on and that she has yet to do more for progress and re­pay so­ci­ety.

The 59-year-old came to China Daily’s in­ter­view, mi­nus the prodi­gal, lav­ish dress-up one would ex­pect of her, and ex­hibit­ing traces of the hum­ble­ness that char­ac­ter­izes a hand­ful of Asia’s po­lit­i­cal greats.

Hong Kong was up­per­most in her mind as she kicked off the dis­cus­sion. “To me, Hong Kong is a blessed place that has achieved pros­per­ous de­vel­op­ment and, with our renowned re­silience, we have rid­den out the storms in the past 20 years.”

Cur­rently as chief ex­ec­u­tive of­fi­cer and ex­ec­u­tive di­rec­tor of Kingston Fi­nan­cial Group Ltd, which she co-founded with her hus­band 24 years ago and named after their son, Chu was named by Forbes in Jan­uary as Hong Kong’s rich­est woman and the city’s 14th wealth­i­est in­di­vid­ual.

It was a burn­ing sen­sa­tion to take the plunge into the se­cu­ri­ties trade that prod­ded her to re­turn to her home­land Hong Kong in 1992, after hav­ing lived and stud­ied in the United States to which she em­i­grated when she was just 18. Her alma mater was G olden Gate Univer­sity in San Fran­cisco, which spe­cial­izes in law, busi­ness, tax­a­tion and ac­count­ing — fields that would be the trump cards for her fu­ture bro­ker­age busi­ness in Hong Kong.

To Chu, she had crossed the Ru­bi­con in opt­ing to pick deal­mak­ing and sec uri­ties trad­ing as her prin­ci­pal line of busi­ness in def­er­ence to prop­erty — an area in which she had done re­mark­ably well while in the US. The cost of run­ning a real-es­tate busi­ness was high and Hong Kong, at that time, was al­ready in the clutches of well-en­trenched devel­op­ers, she re­calls. Thus, the se­cu­ri­ties in­dus­try was the ob­vi­ous choice and Chu got the ball rolling with the in­cep­tion of Kingston Se­cu­ri­ties in 1993.

For­eign and lo­cal bro­ker­ages had an equal share of the city’s se­cu­ri­ties busi­ness in the 1990s, but the sub­se­quent col­lapse of lo­cal gi­ant Pere­grine In­vest­ments Hold­ings Ltd and other key play­ers at the height of the 1997 fi­nan­cial cri­sis reshuf­fled the mar­ket.

Due to sound risk man­age­ment, says Chu, Kingston Fi­nan­cial Group’s busi­ness not only sur­vived but flour­ished, and this fu­eled her op­ti­mism that, one day, her group could stand up to the likes of be­he­moths Mor­gan Stan­ley of the US or No­mura of Ja­pan.

Eye on the main­land

“In the wake of the global fi­nan­cial tur­moil in 1997, I also re­al­ized that foc us­ing just on the bro­ker­age busi­ness may re­strict a com­pany’s growth,” she says. Since 1999, the group has brought in­vest­ment bank­ing into its or­bit and be­gun tap­ping busi­ness op­por­tu­ni­ties on the Chi­nese main­land. It went a step fur­ther and started bring­ing into Hong Kong main­land pri­vate en­ter­prises that might not ap­peal to for­eign in­vest­ment banks when it comes to a list­ing on the Hong Kong stock mar­ket.

“The Hong Kong mar­ket is rel­a­tively small and I guess most of the lo­cal com­pa­nies had al­ready gone pub­lic on the bourse in the past 20 years.”

China’s ad­mis­sion to the World Trade Or­ga­ni­za­tion in 2001 was an­other wa­ter­shed as the coun­try’s rapid open­ing-up led to blis­ter­ing busi­ness com­pe­ti­tion on the main­land, with Hong Kong grad­u­ally emerg­ing as the key and only off­shore fund rais­ing cen­ter for main­land com­pa­nies en­gaged in such di­verse fields as bank­ing, in­sur­ance or in­for­ma­tion tech­nol­ogy, fed by the huge mar­ket po­ten­tial and cap­i­tal stim­u­lus.

“Our 17 years’ ex­pe­ri­ence in en­gag­ing with main­land en­ter­prises, plus field vis­its across the bound­ary, has taught me a lot, in­clud­ing Chi­nese cul­ture and his­tory,” says Chu.

While Kingston was not the only com­pany in­volved in the busi­ness, she be­lieves their knowl­edge of and ex­per­tise in merg­ers and ac­qui­si­tions, par­tic­u­larly when it comes to small and medium-sized com­pa­nies, gave them the aces over other in­vest­ment banks.

In 2006, Kingston Fi­nan­cial was be­stowed with the ac­co­lade of be­ing at the top in terms of share place­ment and un­der­writ­ing in the Hong Kong mar­ket, with the num­ber of deals sealed hit­ting 47, fol­lowed by Haitong Se­cu­ri­ties and Guo­tai Ju­nan Se­cu­ri­ties, ac­cord­ing to Bloomberg. As a fi­nan­cial ad­viser on merg­ers and ac­qui­si­tions, Kingston Fi­nan­cial fin­ished third with 22 deals — be­hind Gram Cap­i­tal Ltd and Somer­ley Cap­i­tal Hold­ings Ltd.

Chu ap­plauds the com­pany’s set­ting up of an in­vest­ment bank­ing unit fo­cus­ing on small and medium-sized main­land en­ter­prises and the list­ing of Kingston Fi­nan­cial in 2012 as mile­stones in the group’s de­vel­op­ment, al­low­ing it to get in touch with var­i­ous busi­ness in­sti­tu­tions.

In her vie w, the big gest change seen in the mar­ket in past two decades has been the in­flux and pro­lif­er­a­tion of main­land se­cu­ri­ties houses in Hong Kong, which cur­rently ac­count for more than half of the num­ber op­er­at­ing lo­cally. For­eign and Hong Kong bro­ker­ages make up the re­main­ing 30 per­cent and 20 per­cent, re­spec­tively.

Chu sees main­land en­ter­prises play­ing a more crit­i­cal role in Hong Kong busi­ness life and, in the next five years, Hong Kong should ride high on the back of the na­tion-led Belt and Road (B&R) Ini­tia­tive and the Guang­dong-Hong Kong-Ma­cao Greater Bay Area plan.

In this re­spect, Kingston is re­solved not to miss the boat, hav­ing al­ready es­tab­lished a branch in Shenzhen’s Qian­hai Free Trade Zone, but laments that de­vel­op­ment progress there has been slow.

Walk­ing the ex­tra mile

On her vis­its to sev­eral Asian coun­tries, in­clud­ing Viet­nam, In­done­sia, Malaysia and the Philip­pines, ear­lier this year, she found many main­land com­pa­nies have be­gun plow­ing much of their re­sources into those places, par­tic­u­larly in ar­eas like real es­tate and in­fra­struc­ture.

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She’s hope­ful that with the Greater Bay Area com­ing on stream in the next decade, Hong Kong’s mar­ket po­ten­tial is promis­ing, sug­gest­ing that the new HKSAR Gov­ern­ment walk the ex­tra mile by or­ga­niz­ing more tours for lo­cal busi­ness­men to help them ex­plore the op­por­tu­ni­ties in the coun­tries and re­gions along the B&R.

Chu finds com­fort in that reg­u­la­tions in the lo­cal mar­ket have markedly im­proved over the years, beef­ing up as­sur­ances that with stricter li­cens­ing cri­te­ria for bro­ker­ages, it wouldn’t be easy for them to go to the wall or shrug off their re­spon­si­bil­i­ties to share­hold­ers and in­vestors alike.

As a mem­ber of the Na­tional Com­mit­tee of the Chi­nese Peo­ple’s Po­lit­i­cal Con­sul­ta­tive Con­fer­ence, she has called for deeper co­op­er­a­tion be­tween the Hong Kong and main­land fi­nan­cial sec­tors with re­gard to the CEPA (Closer Eco­nomic Part­ner­ship Ar­range­ment), as well as the B&R and Greater Bay Area projects. Of in­ter­est would be to en­cour­age in­sti­tu­tions, in­clud­ing se­cu­ri­ties houses, to get in­volved in the bond mar­ket on the heels of the re­cent launch of the much awaited Bond Con­nect, which al­lows Hong Kong and for­eign in­vestors to tap into the world ’s third-largest bond mar­ket.

One word of cau­tion though — the bro­ker­age busi­ness, Chu says, is be­ing largely im­pacted by the ad­vance of tech­nol­ogy, their lead­ing busi­ness model has evolved into be­ing in­ter­net driven with a faster and broader spread of news.

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