HKEX CEO Nicolas Aguzin on brand-new IPOs, China, Middle East and Aramco

Excess cost savings from Chinese families might be development chances and will likely bring “active” financial efficiency for the Hong Kong Exchanges and Clearing, its CEO informed CNBC on Thursday.

“I think the second and third quarter should be active quarters in terms of economic performance by China,” Hong Kong Exchange and Clearing CEO Nicolas Aguzin informed CNBC’s Emily Tan.

He stated he sees about $2.5 trillion dollars in excess cost savings built up by Chinese families throughout Covid.

“All that consumption that didn’t have the opportunity … all of a sudden is going to be turned back into the market, creating great opportunities for growth,” Aguzin stated.

The CEO’s remarks followed the bourse operator launched complete year incomes for 2022 that saw an almost 20% drop in revenues, with the overall quantity of revenue attributable to investors at 10.08 billion Hong Kong dollars ($ 1.7 billion)

Meanwhile, HKEX saw a record 4th quarter high, with its revenue attributable to investors at HK$ 2.98 billion, an 11% dive compared to 2021.

In HKEX’s incomes declaration, Aguzin stated a “horizon of opportunity” lies ahead for the year.

“We will continue to see the release of Mainland China’s domestic savings, the exponential growth of investment flow in and out of the Mainland, and the acceleration of international participation in the Mainland’s economy,” he stated in the release.

Shares of HKEX quit gains of more than 1% after the incomes release and closed flat on Thursday.

HKEX saw just 90 brand-new IPO listings in2022 That’s compared to 182 IPOs in 2019 and 218 brand-new listings in 2018, HKEX’s market data revealed.

“Macroeconomic and geopolitical conditions led to weak sentiment and softness across the global IPO market,” the business stated in its incomes release.

However, Aguzin stated in the declaration there were “signs of encouraging momentum in the IPO market” in the 2nd half of the year.

Looking ahead to 2023, he informed CNBC, “It should be a much more constructive year,” and highlighted that there’s a “positive momentum that we’re having in China itself.”

Bloomberg reported earlier Wednesday that Chinese authorities have actually asked state-owned business to phase out utilizing “Big Four” U.S. accounting companies.

Asked if there’s an increased danger of business delisting, Aguzin responded to: “I don’t know how delistings will proceed, or if there will be. I mean that’s a negotiation that’s taking place and it will follow its own course,” he stated, including that he thinks there is worth to having “more international interaction.”

“We are the window that connects China and the world. And we are doing what we can in terms of making sure that there is more interaction, more connectivity.”

Asked about efforts to bring in Saudi Aramco, the state-owned oil giant in Saudi Arabia, Aguzin stated: “What I’m most excited about the Middle East, is the opportunity that you have with the top 10 asset managers, sovereign wealth funds from there.”

“They have almost $3.8 trillion under management,” he included.

“We’re always open to Middle East companies that can come if they wanted to. That can be channeled in this part of the world,” he stated.

The CEO stated HKEX’s signed memorandum of comprehending with the Saudi Tadawul Group is still in its “early stages.”

“We’ll also have some exchange of personnel, so lots of initiatives – and we’re in early days so we’ll have to see how it turns out,” he stated without elaborating even more.

“The key point is making sure we have that connectivity. It’s two great markets — they have the same objectives that we have. They want to connect, they want to make sure that the investors have opportunities, that their companies can develop, that they can work on this diversification.” he stated.