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00:00Of course our guest is here Nicholas Agassi. He is the CEO of the Hong Kong Exchange. And as you rightfully said he is the former Asia PAC chairman of J.P. Morgan as well as the head of international banking at J.P. Morgan. But now since May 24th or thereabouts you've been the CEO of Hong Kong Exchange. Obviously much of your time since you took over as the CEO here has been consumed by the regulatory changes and the turmoil on the markets here and the sell off in many of the platform companies. How are you as the head of the sea of the market here going to weather the storm. Because we don't know how deep and how long this is going to last. Well thank you. Great to be here. So firstly it's it's it's obviously a great day for us because we've announced our results which is you know record revenues record profits record connect program revenues as well. So lots of good things as to the regulatory environment which is like your first question. The thing is this is happening all around the world. We see a lot of anti-trust regulations being implemented on big tech. It's happening in Europe. The Chinese authorities are in their long march to seeing how they're going to regulate this part of the industry which is the new economy. Different experiences around the world. They're doing it in their own way and trying to adjust to what's the right way to regulate this. So this will take some time to trickle down through the system but we can't downplay the significance of it. When you look at the weighting of the Hang Seng index like Ali Baba's number one with about 10 percent and number four is Tencent in number five has made one. Three of the top big companies that are under direct regulatory scrutiny right now about 23 24 percent of the market weighting of the Hang Seng index. So there's so much pressure internationally as well to do we stay in. Do we pull out. That's the question a lot of international investors have right now that you have to deal with. You talked about these challenges in the earnings release today. Yes and absolutely. Now we have not seen the volume decrease amount actually. Volumes had pretty constant and there is continued activity. I do believe that there will be an impact. We have to see how this impact trickled through. But we're seeing similar type of modifications to how big tech works all around the world. All platform businesses are being scrutinized how they use their data how they manage information about their clients. Do they have too much power. How are we going to manage there. How they deal with the public. So I don't see that too different from what we're seeing in other places. It may be perhaps in its own way. In some sectors like education he may be in a specific way that we don't see too much in other places. But if you look at big companies it's very very similar. How is it impacting the IPO pipeline. Because they were down in the second quarter after what was a blistering first quarter. That I mean that's correct. I mean if we look at the first six months 46 IPO shows that's double what it was in the first six off of last year. It slowed down a bit on the second on the second quarter. And the pipeline is actually at record levels. I mean if we look at how many companies have actually filed and are being analyzed we have around 200 companies. So that's a very very significant thing. Healthy pipeline. But as tech holding off right now there've been lots of reports that bite dance perhaps is going to go ahead despite its regulatory scrutiny. First of all in the first six months of the companies that listed this 46 that I mentioned 92 percent were tech companies. So they are the ones that are coming. The companies will of course assess the market. When is it too volatile to go. But. But there are companies listening. There's a listening ceremony that we have tomorrow. I mean we had one last week. I mean so. So the activity has slowed down because some companies are evaluating the market. Is this the best market for me to go or not. He has low down the pipeline remains very very strong. And we actually have more and more companies that are inquiring about doing an IPO in Hong Kong possibly companies that we're perhaps analyzing other markets. And now they're asking a lot of questions about Hong Kong. How are you going to put your personal stamp on this role at a time of course of great volatility. You know there's talk of course the Paul Chan the financial secretary told me broke news with me saying he was going to welcome snacks. The framework agreement is it almost ready. Well I mean there is a spark. This is one of the products that has been discussed for some time. There is a consultation that is going to be launched probably over the next few weeks and post that consultation. And depending on what the output of that consultation is we'll set up the right framework. There are conversation on conversations that are ongoing between the securities regulators and ourselves and the government. And we're trying to make a framework for. Instrument that is actually a high quality instrument. We want to give opportunities to investors but we have an obligation also to protect the investors interest. All right. Do you see a decoupling with Hong Kong because of the regulatory scrutiny in China a decoupling between the S & P and of course the Hang Seng. So if I look at the data I don't see any possible decoupling in the sense that we're seeing more international investors participating in the market. I mean if I give you a little bit of the historical framework of will you look at 2019 when there was eighty nine billion dollars on average every day then going up to one hundred and eighty billion dollars. And right now I mean when 88 and it's almost double you know it's just very significant. You also talked to in the conference call today about data revenue about 4 percent for the Hong Kong exchange rate now. How are you going to increase data revenue. You want to obviously increase data revenue at a time when China seems to have an iron fist grip on data. Yes. This is data that we have that we we have to try to use it in as efficient way as possible. So if you look at the averages for other exchanges around the world it's a higher number. So what we have to do is to make sure are we doing all the right things that we can with our data. In terms of commercializing with our participants with the investor community. And that's what that's what it is. It's a little bit data that different data than the one of some of the players.

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HKEX IPO Pipeline Is at Record Levels, CEO Aguzin Says

Hong Kong Exchanges & Clearing Ltd. Executive Director and CEO Nicolas Aguzin discusses China’s market regulation, the exchange’s IPO pipeline, and plans to begin SPAC consultation. He speaks Stephen Engle on “Bloomberg Surveillance.” (Source: Bloomberg)

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