Webb-site.com is
delighted to be publishing today the HAMS
endorsement list. The list is an unprecedented multi-lateral show of support for a
policy proposal in the Hong Kong financial markets. The Government
expressed openness to the idea, and now the market has spoken, loud and
clear. HAMS is an essential element of the future quality and success of
our capital markets, and in turn our financial services sector, the core
of our service-based economy. Now, it is up to the Government to proceed. |
Widespread Endorsement for HAMS Proposal
3rd September 2001
Webb-site.com is delighted to be publishing today the HAMS
endorsement list. The list is an unprecedented multi-lateral show of support for a
proposal in the Hong Kong financial markets. For many participants, this is the
first time they have ever publicly endorsed a policy proposal of any kind - it
is simply a very unusual request that goes to the highest levels of the
organisation. As such, the level of response has been demonstrative of the depth
of feeling on this issue. Many of the endorsers chose to include statements
which we commend you to read.
The message to Government is clear. You asked for public
comments on the proposal - and the market has spoken, loud and clear. Asset managers, trustees,
media, infomediaries and even some listed companies have come forward and put their
name on the list. For every name you see on this list, there are many more who
have privately expressed private support but for legal or conflict reasons have
been unable to publicly endorse. Investment banks in particular found themselves
torn between the knowledge that good governance will expand their future market,
versus the fear that they may face short-term reprisals for speaking up.
Do not take their silence as apathy - there is a very strong consensus
that HAMS is needed to bring shareholder representation to the corporate
governance playing field and thereby accelerate the reform process. This process
will be slow and painful without shareholder representation.
The Policy Division of HAMS will work to improve the legal and
regulatory framework, representing the needs and wishes of investors, the
missing voice in the market for corporate governance.
The Appraisal Division of HAMS, with its corporate governance
ratings of all listed companies, would provide the incentive of higher ratings
and demand for shares of companies which reach for better standards, while
identifying those who persist with bad governance practices and mobilising the
voting power of minority shareholders through proxy recommendations.
Strengthening the legal rights of shareholders is worth nothing
if the average shareholder cannot afford to enforce them. The Enforcement
Division of HAMS, by quasi-class actions on behalf of investors, will ensure
that legal rights are enforced often enough to create a meaningful deterrent to
bad governance. Prevention is better than cure.
HAMS is a Hong Kong solution to a Hong Kong problem, and we are
delighted to see local professional organisations such as the HK Society of
Financial Analysts, the HK Venture Capital Association and the Technical
Analysts Society of HK endorsing the proposal. At the same time, you cannot have
a World-class financial centre without world-wide investors, and the list of
asset managers shows widespread support both at home and overseas for the
initiative.
With lower risk of losses from bad governance, investors will
pay more for HK-listed equities, which will lower the cost of capital for HK
issuers and support the economic growth of HK and China. The improvement in
market quality will attract more issuers and investors, deepening the market and
promoting Hong Kong's goal of being a world-class financial centre for China and
Asia. That goal is key to our service-based economy. Now, it is up to the
Government to proceed.
© Webb-site.com 2001
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