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The Morning Risk Report: Hong Kong Exchange Sees Jump in Listing Inquiries

By Dylan Tokar

 

Hong Kong Exchanges & Clearing says it has received significantly more inquiries about listings.
PHOTO: TYRONE SIU/REUTERS

Hong Kong’s stock exchange has seen a jump in listing inquiries, the bourse operator’s chief said Wednesday, after regulators in Beijing and Washington pledged to make it harder for companies from China to go public on American stock exchanges.

Nicolas Aguzin, the new CEO of Hong Kong Exchanges & Clearing Ltd., said in his first earnings call with the media that around 200 companies currently have applications to list in the city. “There have been significantly more inquiries” about listing in Hong Kong as the result of the tightening scrutiny from the U.S. and China, he said.

[Continued below...]

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The former investment banker’s comments came after the exchange operator reported record revenue and net profit for the six months to June 30. HKEX’s profit of $849.4 million was up 26% from the same period a year ago, driven by strong trading volumes and a buoyant market for initial public offerings. Its revenue and other income jumped 24% to about $1.4 billion.

Hong Kong has attracted numerous IPOs from Chinese companies, such as short-video app operator Kuaishou Technology, and listings from companies in China whose shares already trade on U.S. exchanges.

 
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Risk & Compliance Forum Survey

We’re conducting a survey of compliance professionals about the impact of the Covid-19 pandemic and the reopening of the economy, with findings due to be presented at the WSJ Risk & Compliance Forum on Oct. 12. If you work in a compliance-related role, we’d love to hear from you via this survey link​.

 

Compliance

A sign indicating cryptocurrencies tether, bitcoin, ethereum and litecoin are accepted at the Hong Kong Digital Asset Exchange store. PHOTO: PAUL YEUNG/BLOOMBERG NEWS

Hackers stole cryptocurrencies worth more than $600 million from Poly Network, a decentralized finance, or DeFi, platform, in one of the largest crypto heists of recent years. In a surprise turn, whoever stole the money then returned over one-third of the pilfered assets.

Poly Network, which uses digital assets for lending and other financial transactions, disclosed the hack in a series of Twitter posts Tuesday. Blockchain security company SlowMist estimated that the stolen cryptocurrencies were worth over $610 million at the time.

 ‏‏‎ ‎
  • A House committee is entitled to some—but not all—of former President Donald Trump’s financial and tax records that it sought from his accounting firm, a federal judge ruled Wednesday.
     
  • Senators introduced legislation Wednesday that would impose new rules for app stores, amid debate over the dominant roles Apple Inc. and Alphabet Inc.’s Google play in the mobile ecosystem.
     
  • A Chinese court sentenced entrepreneur Michael Spavor to 11 years in prison on espionage charges in the first of two national-security cases involving Canadian citizens that sit at the center of a fierce standoff with both Canada and the U.S.
 

Risk

Southwest Airlines’ fresh warnings about the impact of the virus on travel mark a reversal from U.S. airline executives’ bullish tone just a few weeks ago.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

Southwest Airlines Co. said the recent surge in Covid-19 cases is causing bookings to slow and cancellations to rise, showing how quickly the Delta variant is denting economic activity.

The airline said Wednesday that while demand for the key Labor Day weekend remained healthy, the recent slowdown would make it difficult to turn a profit in the third quarter, excluding the impact of government payroll assistance. That is even after a fare sale designed to stoke the return of business traffic in the fall.

 
  • A year after PG&E Corp. funded a trust to compensate victims of California wildfires with company stock, most have yet to be paid, and the shares have fallen in value after the utility acknowledged it might have started this year’s worst fire.
     
  • The American gas industry faces growing pressure from investors and customers to prove that its fuel has a lower-carbon provenance to sell it around the world. That has led the top U.S. gas producer, EQT Corp., and the top exporter, Cheniere Energy Inc., to team up and track the emissions from wells that feed major shipping terminals.
     
  • Belarus announced retaliatory action against Washington, including rescinding its consent of the appointment of the U.S. ambassador, in response to the latest U.S. sanctions on the regime of the country’s authoritarian leader, Alexander Lukashenko.
 

Operations

President Biden has asked the private sector to help accelerate vaccination against Covid-19.
PHOTO: YURI GRIPAS/PRESS POOL

President Biden met Wednesday with the chief executives of United Airlines Holdings Inc. and Kaiser Permanente in a bid to encourage more companies to follow their lead and require workers to get vaccinated against Covid-19.

Howard University President Wayne Frederick and Diane Sumpter, a small business leader from South Carolina, attended the virtual meeting alongside United CEO Scott Kirby and Kaiser Permanente CEO Gregory Adams, the White House said.

The companies and university have all said staff must be vaccinated, and Howard is also requiring students to get the shots. Mr. Biden highlighted the four as a model for other private-sector leaders, as officials race to get more Americans vaccinated and slow the spread of the highly transmissible Delta variant, which has triggered a rise in cases and hospitalizations across the country.

 ‏‏‎ ‎
  • The New York Stock Exchange will require traders to be vaccinated against Covid-19 to access its historic trading floor, stepping up its measures against the coronavirus amid rising cases of the Delta variant.
     
  • McDonald’s Corp. said in a note to employees Wednesday that all of the company’s U.S. corporate workers must be fully vaccinated by Sept. 27 as businesses impose new employee rules amid rising Covid-19 cases
 

Governance

Lt. Gov. Kathy Hochul at an event last week in Albany.
PHOTO: WILL WALDRON/THE ALBANY TIMES UNION/ASSOCIATED PRESS

  • New York Lt. Gov. Kathy Hochul said Wednesday that she is planning for a culture change in Albany as she takes over from Gov. Andrew Cuomo after his resignation over sexual-harassment allegations.
     
  • The National Collegiate Athletic Association said Wednesday that an investigation was unable to reach a conclusion as to whether Baylor University violated its rules when it failed to report a string of alleged sexual assaults that took place within the football program from 2011 to 2016.

 

About Us

Send comments to the Risk & Compliance editor, Jack Hagel, at jack.hagel@wsj.com

Subscribe to The Morning Risk Report here.

Follow us on Twitter at @WSJRisk, @_MengqiSun, and @dgtokar.

 
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