Hong Kong stock exchange names JPMorgan's Aguzin as new chief executive

HONG KONG: The Hong Kong stock exchange operator on Tuesday named JPMorgan Chase & Co's international private bank head Nicolas Aguzin as its chief executive, a role in which he will be expected to step up the bourse's links with China.

The appointment of a non-Chinese person as CEO of the Hong Kong stock exchange operator surprised the market, and Aguzin will have to balance the wishes of authorities in Beijing, international institutions, and Hong Kong local brokers and traders.

Aguzin, an Argentine, takes over HKEX at a time when shares of the company are near record highs boosted by high trading volumes, particularly through the stock connect schemes which link the Hong Kong bourse with mainland markets.

He will replace Charles Li, another former JPMorgan banker, who announced his resignation as CEO of Hong Kong Exchanges and Clearing (HKEX) in May.

Aguzin, whose appointment is subject to approval from markets watchdog the Securities and Futures Commission, has been appointed for three years, starting May 24, HKEX said in a regulatory filing.

"I'm surprised the CEO wasn't more Chinese affiliated," said Ashley Pittard, head of global equities at asset manager Pendal an HKEX shareholder

"The future for the Hong Kong exchange is to tie up with mainland exchanges as a gateway to China's financial hub so this is an interesting decision."

Aguzin is the first non mainland or Hong Kong-Chinese to be permanent CEO of HKEX since its formation in 2000 in a merger of the Stock Exchange of Hong Kong with other local financial market infrastructure providers.

"Our policy with the mainland will not change," HKEX chairman Laura Cha told the media.

"Currently we have a good core team of people who deal with mainland related matters ... So the fact that Mr Aguzin does not speak Chinese will not be a factor that will affect our policy or our relationship with our counterparts."

Hong Kong was the second most popular listing venue in the world in 2020 with deals worth $31.2 billion, compared to Nasdaq's $51.3 billion, based on Refinitiv data.

The exchange has benefited from a series of Chinese companies looking to raise capital in the Asian financial hub via primary floats, including Kuaishou's $5.4 billion IPO this month , as well as secondary-listings from US-listed Chinese companies such as tech firm JD.com.

Citi analyst Tian Yafei said Aguzin's international and investment banking experience could mean HKEX would attempt acquisitions to strengthen areas such as fixed income and currencies and data to diversify revenues away from cash trading.

Aguzin's appointment comes against the backdrop of Beijing's imposition of national security legislation on the city that has clouded its outlook as a leading financial center.

Aguzin was appointed as the CEO of JPMorgan's international private bank in January 2019.

He joined the Wall Street bank in 1990 in Argentina, and was based in Hong Kong as the chairman and CEO of JPMorgan Asia Pacific from 2012 to February 2020.

Martin Marron, the chief current chief executive of JPMorgan's Latin American private bank and head of its Latin America and Canadian operations will replace Aguzin, an internal memo seen by Reuters said.

"(Aguzin) is an outstanding leader and human being ... While we're disappointed he is leaving us, we thank him for his many accomplishments at our company and wish him all the best," Jamie Dimon, chairman and CEO of JPMorgan Chase, said.