A strange side-benefit of the Asia crisis: Hong Kong becomes less brash, and the service improves. “I’ve always preferred living in Hong Kong during a recession,” says John Manser, the great taipan of Robert Fleming, from the comfort of his London office.
How true, how very true, I reflect later as I tip a pathetically grateful taxi driver. With unemployment hovering above 5% – and rising – the people of Hong Kong seem to be recovering their manners. Salespeople even look up from their newspapers and serve you with an attempted smile. The worst-bred taxi drivers in the world are beginning to say words like “hello” and “sir”. Yesterday one tried conversation: “Wanchai very empty. Economy stinky. No-one drink any more.”
Bankers of course are the exception. Drinking is on the up and they’re just as arrogant and rude as ever, even after they’ve been “let go”.
A new bar called Red Rock is jam-packed with as many bankers in work as not. The Mandarin’s Chinnery bar is capitalizing on the gloom of ex-brokers, ex-corporate financiers, and ex-traders by selling five single-malt whiskies packaged on a teakwood board base for HK$220. Mario at the Mandarin tells me demand is brisk.
As I tuck into my roast beef at the Chinnery with one of ING Barings’ rare survivors, a colleague of his walks in. He says he’s been playing golf this morning. “Who was the client?” I ask thoughtlessly and receive a sharp kick under the table. “Giles is no longer with us, I’m afraid,” the Barings man tells me later. “He’s a social golfer now.”
The cull goes on. SG Securities cans 124 equities people at the beginning of December. A little embarassingly its Asian chief executive Jean-Pierre Mustier is quoted in a book – to be published on December 21 – as saying: “We have always seen the crisis as providing opportunities to invest and grow in the down part of the cycle. That was true at the end of 1997 and we have not changed our view as of late 1998.”
The Chinese fortune tellers knew it was going to be a bad year for Merrill Lynch Asia when they studied the surnames of the new heads of equity, investment banking and debt: Chek LOW, David POOR, and Craig WEAKley.
Weakley has departed for London having made the fixed-income team more “nimble” and is replaced by former liquid government bond trader Richard “We have a problem” Huston.
Morgan Stanley’s head of Asian fixed income, Michael Dee, has hit himself and his staff where it hurts: imposing economy class travel even on flights to New York.
That especially American term “commitment” has left east Asia and emigrated to the Middle East where the Tomahawks are bashing Saddam. Only Goldman Sachs and CSFB – which led the $1 billion deal for China in December – are the possible exceptions. In CSFB’s case the evidence is right there on the carpet – all four floors covered in state-of-the-art rug, at a cost of $4 million. Apparently not even bond-salesman’s blood will stain the super-fibre.
Goldman has negotiated what might be described as the deal of the year from Hong Kong tycoon Li Ka Shing. Goldman will be the anchor-tenant at his ugly new Cheung Kong Center on the site of the old Hilton hotel. Word has it Goldman secured a 10-floor deal which includes a lengthy grace period, decoration at the landlord’s expense and allegedly a guaranteed number of Hutchison Whampoa deals. The rent for ordinary mortals is HK$47 per square foot per month: analysts calculate the Goldman deal works out at more like HK$27. It’s a buyer’s market all round.
When 200 new apartments were sold in Shatin at the beginning of December there were 200 bankers touting for mortgage business. A ratio of one mortgage salesman to each home-buyer gives a whole new meaning to the concept of the private banker.
Signs of the Japanese pull-out from Hong Kong become increasingly visible. The closure of top Japanese department store Daimaru on December 31 has left the surviving Japanese bankers here one less place to buy their wives a kimono.
Video chain KPS is bankrupt and Blockbuster of the US is negotiating to buy the pieces. The aggressive approach of KPS put most of its competitors and then itself out of business. Now, renting a video here is nearly as impossible as getting an HSBC banker to talk about the future of the peg.
The peg is what keeps the local currency at 7.8 to the US dollar. Common sense says it won’t last for ever.
But December 4 was a big day for Michael Taylor, economist at Indosuez WI Carr, who had said that by then the peg would be history. The South China Morning Post marked the day with a cartoon of Taylor hanging from the peg by his dungarees.
Bad news too for big-game hunters: JP Morgan has recalled its Asian president Adam Howard to North America. Howard was one of the 15 Asian big-game hunters identified by Euromoney in September 1997. Of the 15 only five remain in Asia.
No Jardine Fleming man or woman was named among the 15, which may be one reason why the mandarins at Robert Fleming in London are tightening the leash on Jardine. Not so, says Manser, Flemings is “going global”.
The name game continues apace. The venerable institution HongkongBank is finally to change its name to HSBC. The brand HSBC now appears at the end of the bank’s commercials, one of which involves three Chinese women discussing the special merits of joint accounts: to keep their husbands under control.
In Chinese, however, the bank retains its august name Wayfoong – meaning source of plenty – so for the vast number of Hong Kongers the change is less traumatic than you might imagine. The name HSBC is already being used in Japan and Korea, where the image suggested by Hong Kong is closer to plastic flowers than high finance.
As I ride to the large and impressive, but distant Chep Lap Kok airport, I console myself that the express train is getting there faster than my Ferrari Testarossa. However, that thought explodes as Bond breaks up on the mobile.
