Amid geopolitical tensions and China’s economic downturn, global investment bank and asset management bosses are getting back together in Hong Kong next week to reposition themselves in the second-largest economy in the world and its offshore financial hub.
The Hong Kong Monetary Authority is hosting the Global Financial Leaders Investment Summit, a premier event starting Monday. Among the attendees are David Solomon, the chief executive of Goldman Sachs (GS.N.), James Gorman, the head of Morgan Stanley (MS.N.), Jane Fraser from Citigroup (C.N.), Noel Quinn from HSBC (HSBA.L), and Bill Winters from Standard Chartered (STAN.L).
Speaking at the event, which has “living with complexity” as its central topic, are the leaders of Blackstone Group, Carlyle Group, Citadel, and other organizations.
Executives are arriving in Hong Kong when the city has lost hundreds of jobs in asset management and banking due to a slowdown in Chinese dealmaking and stricter regulations imposed on the industry since the first summit last year. The purpose of the gathering was to announce Hong Kong’s return as a significant international financial center after the COVID-19 pandemic’s interruptions.
“The primary concern of visitors to Hong Kong is the state of the Chinese economy and the potential fluctuations that may arise,” stated Diana Parusheva-Lowery, who oversees sustainable finance and public policy at the Asia Securities Industry & Financial Markets Association in Hong Kong.
With just $2.7 billion raised in the third quarter, the Hong Kong Stock Exchange is the 11th largest venue for initial public offerings this year—a far cry from its top spot for most of the previous ten years. According to official figures, the territory’s assets under administration decreased by 14% in 2022.
A.P. Moller-Maersk (MAERSKb. C.O.), a shipping company, said on Friday that it would be laying off 10,000 employees in response to declining freight rates and a slowdown in demand for container shipping. The company also reported a sharp decline in profit and sales for the third quarter.
The Danish business maintained its projection for operating profit and sales for the entire year, but it now projects that both will fall short of the range. CEO Vincent Clerc stated, “Our industry is facing a new normal with subdued demand, prices back in line with historical levels, and inflationary pressure on our cost base.”
“Since the summer, we have seen overcapacity across most regions trigger price drops and no noticeable uptick in ship recycling or idling,” he stated. The organization had previously issued a warning in August about a sharper fall in the market for seaborne container transportation globally this year due to destocking following the COVID-19 outbreak and poor economic development.
Maersk stated that it intends to reduce its employment from 110,000 in January of this year to less than 100,000, saving $600 million compared to this year. It stated that the restructuring’s $350 million one-time expense would primarily affect its financial performance in 2023.
The business stated that it anticipates underlying profits before interest and taxes to be between $3.5 billion and $5 billion and underlying earnings before interest, tax, depreciation, and amortization (EBITDA) to be between $9.5 billion and $11 billion for the year.
EBITDA fell to $1.9 billion in the third quarter from $10.9 billion in the same period last year, somewhat above Refinitiv poll analysts’ $1.81 billion projection. At $12.1 billion, revenues decreased by 47%.
