Transition for a Hong Kong Giant Trading Firm Jardine Leaves Colonial Past for Chinese Rule
Michael Switow, Monitor, The Christian Science Monitor
One of the most powerful symbols of the old Hong Kong appears to have found a niche in the new.
Since the early 1980s, when London and Beijing began negotiating the terms of Hong Kong's return to China (now about a month away), analysts and investors have wondered about Jardine Matheson group - king of the old British trading companies that founded this colony. Would it survive the change?
And until recently, the public signs were not good. China's official Xinhua news agency denounced the conglomerate four years ago for publicly supporting British Governor Chris Patten's democratic reforms. Xinhua accused Jardine of "an anti-China attitude" and attempting to "undermine the smooth transition" to Chinese rule. In retaliation, China shut Jardine out of Hong Kong's expanded port, critical to Jardine's business. Jardine also roused China's ire by moving its corporate charter to Bermuda in 1984. Then the company pulled out of the Hong Kong Stock Exchange in 1994 in favor of arch-rival Singapore. Both actions showed little confidence in the territory's future. Two stock deals But now, the company's finance arm, Jardine Fleming, has won two prestigious contracts to underwrite stock offerings of Chinese state firms. It will sponsor the new listings, in Hong Kong, of China's largest cementmaker, Ningguo Cement, and state coal firm Yimeng Coal. Competition to underwrite the stock of Chinese companies in Hong Kong is particularly fierce, because investors are practically knocking down doors to buy shares. A recent offering - by the overseas investment arm of the Guangdong provincial government (a province in southern China) - was heavily oversubscribed. Demand for the shares exceeded supply by almost 900 times. Jardine officials have downplayed the news, perhaps to avoid drawing attention to their absence from China's financial activities, despite maintaining the largest presence on the mainland of almost any investment house. …