Lunching in the hub with James Tong of Citi

James Tong is hot. He’s very hot. It’s 33 degrees on the street and James has trekked from his office to meet me at the Foreign Correspondents Club. He plonks himself down and offers apologies from behind a large white handkerchief he’s using to wipe the sweated brow. This gives me the chance to make sure that the set menu list is proffered first while the main menu is almost out of reach.

I was hauled into the office this morning and given a lecture on monetary constraints. “But he’s a banker!” I complained. “Get a loan,” the editor shot back without looking up from his phone.

After an uncomfortable minute or so as I look on anxiously while James casts an eye over the sets, I whisper to the effect that he might want to look at the main menu. But no, thank the lord; he’ll go for the salad and the duck breast with noodles. I breathe a sigh of relief and order the duck but with a soup starter. James wants a coke. I go one better and ask for water. Welcome to austerity dining.

For those who don’t know James well, he’s best known as a shrewd finance banker in the shipping sector, and as an openly gay man. To see him speak at a shipping event both of these aspects of his personality are immediately apparent.

I want to know James’ view on the shipping market and what it’s like to be openly gay in an industry once characterised by Gordon Gecko of “Wall Street” fame.

James’ approach to ship finance is very much in line with the traditional Hong Kong shipowner.

“I’m not an asset financier,” he says. But if the asset is serving a purpose I think shipping is attractive.”

Don’t come to James if you are thinking of buying a ship just to flip it. On the other hand he has no problem with the surge in ship leasing companies.

“There can always be a good transaction. It’s all down to the individual transaction, whether it’s owned by a leasing company or an individual owner/operator,” he says.

“I ask myself, why am I lending? Relationship? Do I know that the client is using the ships as their bread and butter? It’s no different with leasing companies. They just have a bigger balance sheet than your average shipping company. The structure of the deal has to be watertight, like any financing.”

“But what about all the European Banks that have dropped out of the market?” I ask.

“A lot of those banks got burned,” he replies. “Now they are reluctant to invest, what with all the capital adequacy regulations as well. But there are more people coming into shipping. There is a vacuum and it has to be filled. We frequently get tourist investors here. They turn up flash some cash until they get burned in their turn and then some more tourists turn up.”

James’ salad arrives, and my soup. James pushes the greens around a bit before taking the plunge. As I raise my spoon the table seems extraordinarily low.

“I have been in the industry for 18 years,” he says. I started as a junior originator. Then my analyst left and I picked up the whole Asia Pacific. As an analyst I analysed shipping purely based on the numbers. I didn’t even have to see the client. That was when I really began to learn what shipping is all about. It’s why I am so concerned about the nature of the owners and operators but it shows up in the financials. And this approach defines the professional.”

He laughs when I ask if he always wanted to be a ship financier. “I always admire people who are full of conviction when they are young. When I was their age I had no idea what I wanted to do. I was the first person in my family to go to university. At that time I had no role models or exposure to white-collar workers.

“I was 23 when I graduated but I couldn’t be a doctor because I can’t face the sight of blood. English is not my first language so there was little prospect of being a lawyer. So I decided accounting and finance was for me. Even if you go bankrupt you need an accountant, right?”

His introduction to banking initially came through his social life. “The first group of gay men I met were bankers in Hong Kong. They helped me to broaden my horizons. They were all cultured, well travelled, pretty well off.”

“Back in the early 1990s, the gay community was very much underground and could only meet in late night bars; I never went to bars. I don’t drink. But you had to go to certain bars to meet like-minded people. “But who can look beautiful after midnight?” he quips.

“Part of me is jealous of young people and part of me pities them. In the old days it was not something you could talk about. Social acceptance wasn’t there. People have forgotten that many sacrificed their lives.” At which point the main course arrives and the course of the conversation returns to shipping.

“2020 [the date when a global sulphur cap of 0.5% is imposed on world shipping]. Isn’t it horrible? Let me be cynical about this. Actually it’s a blessing in disguise. It cuts both ways. Some ships may have to be laid up. Isn’t that fantastic? So many ships will be unable to operate because of regulation then automatically many shipowners will make lots of money.”

Despite some improvement in the dry bulk sector, James insists that its best days are over, with only minor caveats. “If the US rebuilds its infrastructure there will of course be strong demand for the major bulks. As for China, most of its infrastructure building is behind it. There will be some upgrading but the halcyon days are over. It won’t be anything like the years immediately after China joined WTO in 2001.

“The industry seems to be fundamentally unprepared for slow growth,” he concludes.

On the bright side James declares the Belt and Road Initiative, “the only show in town.

“I think it is good. It has provided a focus. What else is there? Brexit? Brazil? All eyes are on China. This is the first time in history that such a vast country has access to unknown wealth and technology.”

Then, seamlessly, James has linked the connectivity of a global supply chain to spiritual connectivity and the lead that the young have in this space.

“I am hopeful of young people. They are connected, they share the same conscience and they understand their social responsibility. We must encourage them and mentor them. While allowing them to fail.”

My admiration for James goes up a notch at this point. He delivers his homily straight faced while I struggle to suck up a flat noodle that looks like an Elastoplast stubbornly plastered to my chin.

What is emerging from this conversation is that at heart James is an idealist of the 1967 summer of love variety. He refuses to acknowledge the dislocation that is occurring in Europe, in the US, and in Hong Kong.

“I prefer to see what we have in common. Of course there are differences; you are white, I’m Asian. You wear glasses, I don’t. I’m left-handed, you’re right handed,” he says.

“I’m a cool dresser with a fetish for bow ties. You don’t look like you have seen the inside of a clothes store for 20 years,” he might have added. But no, James is all about love and understanding being the only way to save the world. So the next time you are tempted to think that all bankers are hard-hearted, greedy ogres. Give a thought for James.

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