A bank larger than life was responsible for bringing Hong Kong exchange to the rest of the world

In early January, after the early executive’s resignation, the Hong Kong stock market was locked in discussions over the procurement decision that is crucial to its future as the heart of Asia’s most important financial center and a bridge between China and western capital markets.

The choice of who would lead the Hong Kong Exchange and Compensation was overwhelming: go with tradition and install someone from the Chinese mainland or Hong Kong on a boat to establish a relationship with the city at a turbulent time and Beijing. Or bet with a Croatian passport and nickname – Gucho – with an Argentine-speaking Portuguese, known in the commercial floors and meeting rooms of London, New York and Buenos Aires.

To the surprise of an establishment in Hong Kong that assumed 2021 was the time of adventure conservatism, HKEX chose it in February Nicolas Aguzin – Head of Asian operations at JPMorgan, a Hong Kong resident since 2012 and a banker known for his rise to the stratosphere through the US group.

Aguzin joined JPMorgan in 1990 in Buenos Aires. When JPMorgan CEO Jamie Dimon signed a press release announcing that Aguzin’s new job at HKEX was also using the Gucho brand, it indicates his reputation as a great character in the Spanish word game. “Gucho is a great leader and human being,” Dimon said.

Taking this job shows that he has a very entrepreneurial mindset. Argentine runners in Asia – it’s booming

Before the first day he was head of HKEX on Monday, the focus was on Aguzin’s appointment with a 52-year-old non-Chinese speaker. However, this focus on former JPMorgan colleagues and top figures in the financial industry does not miss the purpose of the appointment. Aguzin, a smooth trader at JPMorgan and known as a consumer trader, has led to a resurgence of the global intentions of a stock market at risk of over-reliance on narrow regional flows and the changing momentum in Beijing.

“In recent years, the Hong Kong stock market has repeatedly made strides to gain a foothold in China, and has yet to do much work to connect with the world,” wrote Weijian Shan, president of PAG, one of Hong Kong’s largest investment groups, in China’s Caijing magazine. “Being a foreigner, Gucho should have a better understanding of how to make efforts in this area, which could give him special value on the Hong Kong Stock Exchange.”

Others see a more immediate opportunity for new business. “I can see it convincing companies in Southeast Asia and Latin America to list there,” said one person who worked closely with him.

Aguzin does not inherit a problematic business. HKEX’s previous legacy – another former JPMorgan banker – Charles Li it is very successful. The decade-long leadership was focused on fostering close cooperation with exchanges in Shanghai and mainland Shenzhen. Through Hong Kong, he was a pioneer in schemes that led to greater investment flows from and outside the Chinese mainland.

During Li’s tenure, the market capitalization of HKEX companies doubled to HK $ 53 million ($ 6.7 million), making it the world’s most popular headquarters for initial public offerings over the past 12 years. Companies raised $ 398 billion in 2020, the highest number in a decade in a decade. IPOs and trade flows have been successful record volumes in recent months.

Li also admitted that the exchange was dependent on Chinese capital and liquidity. Chinese companies now make up more than half of those listed in Hong Kong, and account for more than three-quarters of the total value of exchange companies.

Attempts to direct Li was a surprise bid of 32 billion euros to buy the London Stock Exchange Group in 2019 he came out quickly and humiliated. The attention of the world was set in motion anti-government protests Rather than the strength of its Hong Kong stock market, the failure exacerbated the difficulties of reconciling economic and political interests between Asia and the West.

A member of HKEX’s management deplored the LSE control that had been suspended, saying international unification should be a priority under Aguzin’s leadership. “It should have been done a long time ago,” they said, adding that Beijing and Hong Kong would benefit from a closer tie to China’s capital markets.

Several close friends at JPMorgan have said Aguzin’s appointment has indicated that the exchange has not given up on achieving a significant international merger, there may also be another twist in the LSE.

That’s his first big initiative, said former JPMorgan colleagues, as Gucho will use a lot of his skills as a negotiator and diplomat. His focus may be on doing business, but another duty will be to unite with Hong Kong’s broad efforts to protect Asia’s reputation as an international financial center, after setting up a nice discussion in Beijing. national security law and severe borderline limitations of coronavirus. HKEX will have to fight hard to gain regulatory approval for any agreement in many western countries depending on the state of its relations with China.

$ 1.3 million

Nicolas Aguzin’s basic annual salary at HKEX

“If Hong Kong has a real desire to be the first place in the world to list the best companies in the next decade, someone in the world and someone who understands the emerging markets very well, grew up in one, but has been trained in global organizations, Nick makes a lot of sense.” , says Micky Malka, a Venezuelan venture capitalist and former member of the Aguzin association.

As the head of HKEX, Aguzin will receive a salary of $ 1.3 million annually, about 7 percent more than Li. It will also acquire 211,756 shares – currently around HK $ 100 million – that can be sold in full after two years of service, plus a performance bonus. The payroll is unlikely to be his main incentive, however. Aguzin’s wealth is worth millions of double-digit dollars, including MercadoLibre’s response to Latin America’s Amazon and Alibaba. A member of MercadoLibre’s board, Aguzin has sold about half of the company’s shares in recent years for more than $ 7 million.

Marcos Galperin, the billionaire Argentine who founded MercadoLibre, said Aguzin is “sustainable”. Aguzin was the chief banker of MercadoLibre IPO, and the company’s market capitalization was $ 69 billion. “I found out in 2001 that we were a poor start-up with less than $ 10 million in revenue and it was with JPMorgan,” Galperin said. “I told him we would never hire an investment banker. Six years ahead and he was the one to go on our stock market. “

Aguzin did not specify either HKEX’s immediate plans or his longer-term vision. He used his first London speech at the Metal Exchange Asia Summit in London last week to remind listeners that Argentina was a country known for being “wine, steak, football and tango,” but about Hong Kong’s position in China’s great history. , he carefully referred to the “key role” of the city.

In a video posted by HKEX on Friday, Aguzin said it was “still the first days” to talk about the strategy, but said he wanted to increase the exchange by keeping “China anchored.”

“He could do everything he wanted and wanting to be the head of the Hong Kong stock market tells you a lot about his desire to be risk-taking and influential,” Malka said. “He always had the shield of the JPMorgan brand, but now this is him, his career, his face. Taking this job shows that he has a very entrepreneurial mindset. The Argentine runner runs in Asia. He’s a pelota player. “

By the end of the first week, Aguzin’s entourage had begun to deal with the lack of Mandarin disease: Chinese friends explained that his appointment gave more importance to the nickname. To Chinese speakers, a friend told him, Gucho seems to have a similar character for “taking care” of a company and “raising funds”.