Hong Kong’s regulators try to push back against Chinese market practices

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Chinese banking methods have crept into the underwriting process behind the deals. Global investors are up in arms. Caught in the middle is Hong Kong’s Securities and Futures Commission

Western banks have decried the shift, claiming it hampers price discovery. Global investors are also up in arms about what they say are inflated stock and bond offerings. Hong Kong’s Securities and Futures Commission is attempting to address the clash. It has released a consultation paper that proposes codifying Western norms.

All this has been changing, however. Today many companies, mainly ones hailing from mainland China, do not assign roles to the banks until the last possible moment, allowing for a scrum of investment banks to vie for supremacy—and fees—in the syndicate. In some recent bond deals dozens of banks have ended up on the ticket, each scrapping for a puny fee. Instead of a co-ordinated pricing process, the result is muddied price discovery.

Many global banks support the establishment of a set of standards. “We all have to be singing from the same hymn sheet,” notes one banker. Mainland institutions, though, have a different tale to tell. They say the griping from Western rivals mainly reflects sour grapes. Chinese companies have gone from issuing about $20bn in-dollar denominated bonds in 2011, or about 1% of global issuance, to about $209bn in 2019, or 6% of the global market, according to Dealogic, a data provider.

 

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A set of standards that will trigger another financial crisis, and then beg Chinese different tale to bail them out again.

Nonsense . The current system has been rigged all along and only demanding changes because the system is in trouble and running on permanent QE and bailouts

this is terrible news

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The C P C, MUST also Celebrate such Murky Dealings,as they Insist. So, the DEMOCRATIC GOVERNMENTS, with all limitations are the BEST.

good luck

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Hong Kong’s regulator rightly resists the bad habits of mainland financeThe proposed code of conduct is a test of whether Hong Kong’s financial regulator can uphold and improve standards in politically fraught times Hong Kong is doing well👍👍👍 愿香港走出困境,续写辉煌 Mainland China’s “bad”financial habit successfully resisted 2008 financial crisis caused by Anglo-Saxon countries’ fraudulent financial products and irresponsible government regulations.
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