Hong Kong bankers out to capture major slice of OBOR project financing

Hong Kong bankers and private equity players are on a mission to capitalise on the infrastructure financing opportunities that China’s ‘Belt and Road’ initiative are likely to throw up over the next decade, the Chairwoman of its Financial Services Development Council Laura Cha told the Asian Financial Forum this week. “Hong Kong has an important role to play – and not just as an intermediary,”she said, adding that the city aspired to play a ‘super-connector’ role in China’s plans to created a $5bn economic zone across Eurasia.
The great and the good of the Hong Kong banking sector lined up at the forum to support Cha. “Unlike China, Hong Kong has a very well developed secondary market,” China Everbright CEO Chen Shuang pointed out. “Over the years, this has allowed Hong Kong to help Chinese corporates raise capital as they have gone global.” New institutions – such as the Asian Infrastructure Investment Bank (AIIB)  and the Silk Road Fund – would only  play a limited part in raising the money, he predicted, and called on Beijing to  look at  France’s model of securitising infrastructure projects.
Among those institutions at the vanguard of this drive to capture a slice of the new action will be the Bank of China Hong Kong (BOCHK), whose Vice Chairman Yue Yi told the forum that it was already lining up some 50 branches across the region with the goal of  generating $20bn worth of business.
Gordon French, Group General Manager and Head of Global Banking and Markets at HSBC, estimated that  China would  initially provide some US$240bn  to kick-start the project. If Hong Kong could recycle capital from the savings glut in Hong Kong and China, it could be a “watershed”. The transactions could not all be financed by bilateral loans alone, he said, predicting that  much of it would have to come from the equity and debt capital markets.“If it is going to be done, it will be in Hong Kong.”