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Chinese state media blasts Hong Kong bid for London Stock Exchange
Chinese state media has seized on the rejection by the London Stock Exchange’s of an unsolicited £30bn takeover bid by the Hong Kong bourse.
The People’s Daily, a Communist Party mouthpiece, published a scathing commentary giving a laundry list of reasons as to why the LSE would rebuff Hong Kong Exchanges and Clearing (HKEX), given “persistent worries” over ongoing political unrest, a lack of strategic vision, and a lowball bid.
LSE’s rejection is a sign that Hong Kong cannot break away from the mainland and develop on its own without the support of a China brimming with opportunities, according to the piece.
It also praised the LSE for identifying its existing tie-up with the Shanghai Stock Exchange as its preferred way to access the market in China. The LSE “won’t worry about Shanghai ... as long as China continues to rise, so will Shanghai”.
This is the latest setback for the Hong Kong operator, which made a surprise bid for the LSE last week.
For its ambitious chief executive Charles Li, the move is aimed at expanding HKEX's worldwide reach as its home city loses its lustre as a global financial hub. He remains undeterred by the rejection and plans to appeal directly to LSE’s major shareholders.
Pro-democracy protests have rocked Hong Kong for four months and show no sign of abating. Activists say that freedoms – meant to be guaranteed for at least 50 years after the former colony was returned to Beijing's control – are fast eroding under Communist Party influence.
“Some people in Hong Kong still have a negative view toward integrating into the development of the nation, as they don’t see what opportunities it can bring to Hong Kong,” reads the commentary, taking aim at protesters directly. “This doesn’t just show how short-sighted it is from an economic perspective, but also how narrow-minded from a political perspective.”
The unrest has put companies in a tough spot as they try to toe the line politically.
Over the weekend, HSBC chairman Mark Tucker commented for the first time on the protests, urging Hong Kong to restore order peacefully, and said that violent means would not help protesters achieve their aims.
Hong Kong’s “rule of law is essential to its status as an international financial centre, and we fully support the resolving of the issues peacefully, but under the framework of ‘one country, two systems',” he told a Chinese state broadcaster.
“We strongly condemn violence of any sort, any kind of disruption to communities where customers, staff and shareholders are based.”
Cathay Pacific previously came under pressure from Beijing well after a pilot was arrested at a protest, leading to surprise resignations from its chief executive and chairman as the airline worked to curry political favour.
Beijing authorities have long put the squeeze on companies over political issues by encouraging its 1.4bn citizens to snub various brands or by throwing up a number of regulatory roadblocks – a move that can have devastating consequences for even the biggest businesses.