This week, Hong Kong Exchanges and Clearing Limited’s (SEHK: 388) CEO Charles Li announced he would be handing over the reins at the exchange operator – also known as “HKEx” – when his contract expires next year.
A flamboyant figure who has done a good job of raising the exchange’s profile, Li has also overseen a slew of changes in Hong Kong’s stock market and structure.
On the whole, these have all been positive. Landmark changes such as the Stock Connect Schemes that linked Hong Kong’s market with the burgeoning stock markets of mainland China, in Shanghai and Shenzhen.
However, last year’s audacious bid to take over the London Stock Exchange (LSE) in a US$39 billion deal ultimately failed. In the process, it also raised question marks over Hong Kong’s role in the development of China’s capital markets.
The LSE, in rejecting the offer, stated it would prefer the Shanghai Stock Exchange as a partner to access mainland Chinese markets.
What can’t be denied, though, is how well Li has served shareholders of HKEx over that time. When he first took charge in January 2010, shares were trading at around HK$150 (see below).
On Friday, HKEx shares closed at HK$252.40 apiece, giving investors a near-70% price return during the period. Questions will no doubt be raised on its future path. Can HKEx be as successful as the past 10 years when Li departs in October 2021?
HKEx’s share price performance 2005-present
Source: Google Finance