Lawyers in Hong Kong are bracing themselves for more turbulence as the stock market rollercoaster continues.
The immediate effect, says Donald Tsun, a consultant at Linklaters & Paines' Hong Kong office, has been to see some deals put on hold while others have been abandoned.
Allen & Overy managing partner in Hong Kong Paul Monk agreed. “In the short-term, it has had quite a big impact on certain areas of practice such as international capital markets where deals have been put on hold if not actually aborted, and in the domestic securities market,” he said.
At Simmons & Simmons, partner Tim Conti described the situation as “fragile”. “Things are fairly unsettled,” he said. A number of new issues had gone ahead “probably because it was too late to pull out”, but the general trend was for companies, sponsors and underwriters to think carefully about where to go in the future. Some rights issues had already been postponed.
He pointed out that his firm has not had any major delays in any deals but, “in a couple of transactions, I am sure the underwriters will be thinking seriously about whether they can stick to current timetables”.
As to the future, Tsun is upbeat: “The bankers we have been talking to are confident that the market will be back in a few months.”
Most lawyers, however, are adopting a more cautious attitude. “It's day by day at the moment”, said Conti.