Departing HKEX chairman Laura Cha maps out future
Bourse’s first female head has laid the foundation for growth and collaboration in Asia and beyond
On a sunny morning in October 2022, Laura Cha Shih May-lung, chairman of Hong Kong Exchanges and Clearing (HKEX), took to the stage at the Future Investment Initiative (FII) conference in Riyadh, Saudi Arabia.
In front of an audience of international investors, financiers and policymakers, Cha shared her insights and perspectives on the opportunities available in Hong Kong, the mainland and the broader region.
At that time the city was just embarking on its path to recovery, having not yet fully reopened after the ravages of the Covid-19 pandemic. Cha, accompanied by a team of senior executives including the former HKEX chief executive Nicholas Aguzin, were on an important mission to position Hong Kong’s stock exchange as a resilient and influential force within the global financial landscape.
This endeavour aligned with Cha’s goal of elevating Hong Kong’s prominence on the international stage, a vision she had diligently worked towards since assuming leadership of the exchange in 2018.
Cha’s tenure as the first female chairman in the bourse’s history draws to a close on April 24, with Carlson Tong Ka-shing, the former chairman of KPMG China, tipped to take over.
Looking forward, Cha believes the exchange must continue in the direction of internationalisation, building on the strong foundation she has established.
“I saw very early on that we have to diversify market products and investor base capital,” she said in an interview. “Outside Asia, there is not a lot of recognition [of the Hong Kong exchange]. We have to raise our profile to attract other investors.”
To this end, within a year of becoming chairman Cha attended the World Economic Forum in Davos, taking part again in May of 2022. This provided her with opportunities to establish connections with influential entities in the Middle East such as the oil behemoth Saudi Aramco.
It laid the foundation for future collaborations, which included an invitation for Saudi Arabia’s FII Institute to come to Hong Kong for the inaugural FII Priority Hong Kong conference in December. It was the first time the event had been staged in Asia. “I feel quite proud that we have really started a foundation with the Middle East,” Cha said. “I think that is the first step. The journey has started.”
She strongly believes diversification beyond China is essential.
“China will always be our anchor. But we cannot be just a single focus market, we do have to diversify,” she said.
To be sure, Cha believes the fortunes of Hong Kong’s capital markets are intrinsically linked with the mainland’s. She believes a recent slump in the city’s new listings will recover as the mainland’s economy develops.
IPO proceeds in Hong Kong were down 29 per cent to HK$4.73 billion in the first quarter compared to a year earlier, according to data compiled by the London Stock Exchange Group, as fewer mainland companies listed in the city. A particular blow came recently when Alibaba Group, the owner of the Post, took jumbo deals from its units Alicloud, Cainiao Smart Logistics and Freshippo off the table after assessing its internal reorganisation plans.
“Economic reform [in mainland China] will carry on, and opening up will continue. Those are good signs,” Cha said.
Born in Shanghai, Cha has played a significant role in developing the Hong Kong and mainland financial markets and the
China will always be our anchor. But we cannot be just a single focus market, we do have to diversify LAURA CHA SHIH, HKEX
links between them in her various capacities over the past 30 years.
When she worked for the Securities and Futures Commission in the 1990s, she helped mainland companies list in the city via H shares. She made history by becoming the first – and so far only – person outside the mainland to join the central government at the vice-ministerial level when she was appointed vice-chairman of the China Securities Regulatory Commission in 2001.
She is confident that Hong Kong’s turbulent political situation of the last few years will not put off potential investors, who see the opportunities on offer.
“Article 23 has not come up in my conversations recently with investors,” said Cha, referring to the city’s recently enacted national security law. I think the concern is really the investment opportunities. More than anything, investors are very practical. When there’s money to be made, they will come.”
To enhance its capabilities and prepare for future opportunities, the Hong Kong stock exchange has already added the Saudi Exchange (Tadawul) and the Jakarta Stock Exchange as “recognised” bourses, simplifying the process for companies traded in those venues to consider a secondary listing in Hong Kong.
In a meeting with Hong Kong lawmakers at the Legislative Council on April 8, Bonnie Chan Yiting, the new CEO of the exchange, said HKEX was in preliminary discussions with companies in Saudi Arabia and Indonesia, aiming to attract them to list in Hong Kong.
Six years ago, Cha outlined a strategic plan to enhance the bourse’s competitiveness against overseas exchanges. It included allowing companies with dualclass shareholding structures, commonly preferred by tech firms, to list on the exchange. it also introduced rules enabling biotech firms without revenue to go public. These initiatives have helped Hong Kong to become Asia’s largest, and the world’s second-largest, fundraising hub for the biotechnology sector, which Cha considers a proud achievement.
Now, with a distinguished career behind her, Cha has decided to resign from all directorships except for her role as an independent director of Ant Group, the fintech business affiliated with Alibaba Group. She plans to pursue something that carries “less pressure” and dedicate her time to non-profit organisations.
Cha’s career might have been graced with even more notable achievements had it not been for the economic havoc wreaked by the pandemic. But she takes pride in the way the exchange weathered the storm, remaining fully functional and providing a fair and orderly trading environment for global market participants.
“The foundation has been laid” for the exchange to move forward, she said.