More than 1,700,000,000,000.0 ( 1.7 trillion) US Huawei bond issue in 2024.
New York trading ban has 45% share of Sohu.
Reason is alignment of strategy with national goals.
New York's Financial Power
Absent political power encoded in finance, pension, trade finance.
Preeminent in global trading houses (learned in 20 session).
Talent, Culture, and World Connection
Launched show at Mercy also benefited from concentrations of the high talent in finance, law, and technology.
Creates various cycle: talent, innovation, to capital aggregation, and technology.
Infrastructure and Connectivity
Experienced different culture at HSBC.
Risk Management: US vs. Hong Kong
US
Key is about risk management, volatilities, the correlation.
The last part is about the return of profit.
Hong Kong
Focus on product return opportunities, arbitrage.
Less emphasis on risk management.
Regulatory Bodies
US
Different bodies (large corporation, large borough) provide guidance to license perspective.
Examples: FINRA and the SEC.
Bodies send people to teach what to do and not do.
Hong Kong
Two main bodies: MA and SFC.
Banks do more training to the representative.
MASFC asks banks to do internal control, but does not really provide guidance to the frontline.
Efficiency in Hong Kong finance is pretty low.
Staff needs to receive a few levels of approval before doing trades.
Hong Kong could learn from the US by having regulatory bodies that educate the licensed branch instead of leaving the responsibility to the banks.
Private Equity Market Comparison: Hong Kong vs. New York
Hong Kong
Size: 11,000,000,000 ( 11 billion), the largest city in Asia.
Majority capital source funded to Hong Kong, but the deals are done in Hong Kong
New York
Market size: 88,000,000,000 ( 88 billion) last year.
Globally leading hub of investments and innovation.
Advantage to have access to a very high concentration of PE and the VC dominating players like Blackstar and KBR.
Overall
North America benefits more from market upside, with higher growth rates and more deal size number.
Asia's downside is more significant when the market is of high risk or high uncertainty.
North America has a more mature system in controlling downside risk and promoting upside potential.
Hong Kong: Key Points to Learn
Regulation Environment
Already fairly stringent; consider introducing benefits/incentives to attract global players.
Private Equity and VC Sector
Improve accountability and transparency to attract investors.
Education
Encourage "thinking outside the box" beyond lectures and theories.
Expand education and learning paths for students and new entrants.
Cooperate with start-ups and private companies to support private enterprise innovations.
Ecosystem
Diversify exit opportunities beyond buyouts.
Foster growth of home-based big players to groom startups.
Risk Management Discussion
US has strong regulations but also more errors due to empowerment of frontline staff and willingness to take risks.
Strong security systems in the US allow for the discovery of mistakes.
Hong Kong may have undiscovered errors due to stringent internal controls.
US regulators are more willing to allow risk-taking.
*Recommendations should address regulatory environment, talent grooming, rule of law, and openness to immigration.