Hong Kong Exchanges and Clearing Limited (HKEX) chief executive Nicolas Aguzin has stepped down after a term fraught with upheaval. Having survived COVID-19 isolation, under Aguzin HKEX was confronted with strict regulatory crackdowns and has seen a drop in funds raised from initial public offerings by almost 40 percent. Newly appointed CEO Bonnie Chan will be tasked with maintaining HKEX’s status as a global listing destination


An Effort to Raise HKEX’s International Profile

Nicoalas Aguzin has informed the board of the stock market operator that he would not be seeking reappointment. The decision comes after Aguzin, an ex-JPMorgan banker, has weathered the various storms that have rocked HKEX over the course of his two and a half years as CEO. Beginning at the height of the COVID-19 pandemic when both Hong Kong and China suffered from isolation due to their harsh quarantine policies, Aguzin’s term did not get off to a good start. Since then, HKEX’s share price has taken a 42-percent dive.

By appointing an international executive who has worked in both Argentina and the United States and does not speak Chinese, the exchange looked to promote its internationalisation and reach beyond mainland China. In effect, Aguzin led a number of efforts to promote HKEX internationally and opened new offices in New York and London.

However, these ambitions were cut short when the Chinese government introduced a strict regulatory crackdown on foreign listings from Chinese tech companies. The clamp down not only caused China’s major tech companies to lose more than USD 1 trillion in value, it also damaged Hong Kong’s aim to project itself as a leading international investment destination.

HKEX recognised the difficulty of the period and in a release said it was grateful for Aguzin’s leadership “against a particularly challenging macro backdrop, shaped by Covid and weak global markets.”

Hong Kong has indeed taken a major hit as a trading venue. According to data from Dealogic, funds raised from initial public offerings in Hong Kong have plunged by almost 40 percent with respect to a year ago. The market’s Hang Seng index has also dropped 16.6 percent this year while HKEX’s third-quarter results showed revenues from trading activity that were 10 percent lower than a year ago. And, according to the Financial Times, India’s National Stock Exchange is preparing to take Hong Kong’s place among the world’s largest exchanges.


Leadership Overhaul and Government Push

New CEO Bonnie Chan, currently HKEX’s co-chief operating officer, will step into Aguzin’s shoes in May and become the first woman to lead the exchange. Chan has an over-30-year background in legal and financial services, including experience as a member of the Board of Inland Revenue of the Government of the Hong Kong Special Administrative Region. Her familiarity with the exchange, having worked at HKEX since 2020, will allow her to hit the ground running and immediately take on its waning international standing.

HKEX is also making shifts in other leadership positions as a part of a wider leadership overhaul. Wilfred Yiu, HKEX’s co-chief operating officer who sat beside Chan, will become deputy chief executive and chief financial officer Vanessa Lau will switch into the co-chief operating officer role on top of her current position.

In addition to internal changes at HKEX, Hong Kong’s government has also set out to bolster trading activity in Hong Kong and created a taskforce to address waning stock market listings.


Biotech Boom and Decline

In recent years, HKEX has been successful in boosting Hong Kong’s biotech market by launching a move to allow clinical-stage biotech companies not yet generating revenues to launch initial public offerings (IPOs) via its ‘Chapter 18A’ mechanism. The result was that almost 60 firms – predominantly from mainland China – chose to list on HKEX as a means of accessing global capital, raising around HKD 118 billion in funding.

However, after a record year of new biotech listings in 2021, HKEX saw a significant drop-off in 2022. Only eight new biotech companies listed on HKEX last year, raising an aggregate of USD 473 million; a significant reduction compared to previous years in terms of both number of deals and aggregate funds raised.

Image credit: HKEX