|Bid||427.45 x 0|
|Ask||427.60 x 0|
|Day's Range||425.10 - 431.60|
|52 Week Range||281.50 - 523.00|
|Beta (5Y Monthly)||0.55|
|PE Ratio (TTM)||22.51|
|Earnings Date||Apr 27, 2021|
|Forward Dividend & Yield||0.11 (2.46%)|
|Ex-Dividend Date||Mar 11, 2021|
|1y Target Est||9.20|
(Bloomberg) -- The head of the U.K.’s Debt Management Office is hardly batting an eye over the meltdown in U.S. Treasuries that sent shockwaves across global bond markets last week for one key reason: liquidity at home.Chief Executive Officer Robert Stheeman argues gilts are more insulated from the turmoil because of the market’s smaller size and network of primary dealers, or banks tasked with backstopping the market by buying and selling the securities even at times of unexpected volatility.“I think that will certainly help us cope with whatever the market decides to throw at us this year,” he said in an interview on Wednesday. “We’re not the world’s reserve currency, but we do have, without any doubt -- and I say this with a very high degree of confidence because I see the numbers -- a level of liquidity in gilts which frankly stands out.”Last week’s startling gyrations in U.S. Treasury yields sparked investor concern over liquidity in the world’s most important bond market, with reverberations felt across the globe through poorly-received government bond auctions and rising borrowing costs. And it poses a challenge to the DMO, which plans to sell more debt than expected next fiscal year.Read More: Bank of England Aligns With the Fed Over Rout in Bond MarketIn PerspectiveYet for all of the turmoil in recent weeks, U.K. 10-year yields, at 0.78% on Wednesday, remain around 15 basis points below their average going back to the Brexit referendum in June 2016.The 30-year yield premium over five-year counterparts has fallen from the highest level since 2018, back toward the range set in the final four months of last year. Recent bond auctions show that demand for gilts remains robust, with bids for five- and 10-year notes almost triple the amount on offer and the highest since May and October, respectively.“I’m not for a minute denying that it was a significant move over the last few weeks,” Stheeman said of the rise in gilt yields. “But one does need to look at the longer-term context of where yields are today on a historical basis.”No CrisisWhile several measures indicate more elevated funding stress and stretched liquidity in gilt markets, they are far from crisis-era levels.Bid-ask spreads for 10-year gilts have risen in the past two weeks, but are down from the end-February peak. Meanwhile, the premium between three-month sterling Libor and the overnight rate rose to almost four basis points, the highest since July. That’s well below the high set last March at 61 basis points.Heightening borrowing costs have caught the attention of U.K. politicians, with Chancellor Rishi Sunak warning that rates may rise. Yet while the national debt has risen past a record 2 trillion pounds ($2.8 trillion), historically low interest rates means the cost of servicing it is low.Green PlansThe U.K. will likely take advantage of cheaper borrowing costs when it issues its first green debt, Stheeman said. Britain plans to sell green gilts twice in 2021 as it looks to build out a green bond curve, with a minimum issuance of 15 billion pounds in the coming financial year. Strategists at HSBC Holdings Plc see issuance beginning with a 10-year bond followed quickly by a longer maturity.Britain will be a relatively late entrant to the green bond market, which surpassed a record $1 trillion in issuance last year. The Treasury and DMO are working on the technical aspects of the instruments, Stheeman said, and looking at questions such as whether the country will create its own green bond standards similar to those in development from the European Union.There is some evidence that governments that borrow using green debt can save money, as demand drives up prices and pushes down yields. With the Treasury committed to reducing Britain’s debt levels, green gilts could provide slightly cheaper financing by tapping a rush of pent-up demand from specialist funds.“Right now, the chances of us also doing something which could be extremely attractive from a cost effectiveness perspective are certainly rising,” Stheeman said.(Adds HSBC green gilt estimate in 11th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
HSBC, the target of attack by some protesters during Hong Kong's 2019 street rallies, is stepping up on its support of a government effort to promote jobs and education opportunities for the city's youth. Peter Wong Tung-shun, the bank's Asia-Pacific chief executive and a delegate representing Hong Kong in China's national legislature, has proposed the establishment of an organisation to provide guidance and advice to the city's youth to help them study, work or set up new businesses on the mainland, particularly in the Greater Bay Area (GBA). Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. A Chinese national flag flies in front of HSBC headquarters in Hong Kong, China, July 28, 2020. Photo: Reuters alt=A Chinese national flag flies in front of HSBC headquarters in Hong Kong, China, July 28, 2020. Photo: Reuters Wong tabled his proposals on Thursday in a Chinese language statement during the fourth session of the 13th Chinese People's Political Consultative Conference (CPPCC) in Beijing. The CPPCC has 2,158 delegates who hail from different political parties, professions, and industries. Delegates meet for a week-long meeting in Beijing to discuss policies and recommendations to the legislature. Hong Kong's government introduced a "Greater Bay Area Youth Employment Scheme" in January to create 2,000 jobs in the area for HK$18,000 per month, offering to subsidise the salary by HK$10,000 for each graduate. HSBC, which traces its history to Hong Kong and Shanghai more than a century ago, joined the scheme with an offer of 100 jobs. The bank would also grant up to HK$8 million for scholarships over the next three academic years for up to 100 Hong Kong undergraduates who want to work or study in the GBA. HSBC's history in Hong Kong did not shield it from acts of vandalism in 2019, when the city was gripped by months of street protests. The bank's iconic bronze lion statues at its head office in Central were set on fire and spray-painted by vandals, sustaining damages that required nine months to restore. Some of the bank's branches around Hong Kong were also vandalised in 2019 and last year, forcing HSBC to temporarily shut nearly a dozen outlets in the city during the height of the protest movement. HSBC, the largest bank in Hong Kong and Europe, has big plan in the GBA, spending US$150 million since 2019 on its first global training centre in Nansha, a district in Guangzhou about an hour by car from Hong Kong. Known as the HSBC University, the 11-storey centre will go into operation by 2024 to provide training to over 14,000 HSBC employees in Asia-Pacific as well as senior global executives each year. HSBC earned 53 per cent of its 2020 worldwide revenue in Asia including Hong Kong and China. The bank announced last month a plan to set up a GBA office headed by Daniel Chan Hing-yiu, joining Bank of East Asia and Standard Chartered Bank in creating senior executive roles for the area. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
HSBC bankers "fully knew" that Huawei Technologies controlled the accounts of affiliates through which it did business in Iran, undermining US claims that Meng Wanzhou defrauded the bank by allegedly lying about the relationships, a Vancouver court heard on Monday. Meng's lawyers are pressing their claim this week that the Huawei executive is the victim of an abuse of process, and that former US president Donald Trump tainted the American fraud case against her so badly that the US bid to have her extradited from Canada should be thrown out by the Supreme Court of British Columbia. They are also seeking to further a separate argument about the alleged abuse, that US authorities misled the court with their records of the case. They are applying to have a series of affidavits admitted to the court to bolster that claim. Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. On Monday, Meng's lawyer Frank Addario told Associate Chief Justice Heather Holmes that the record of the case submitted by the US was "manifestly unreliable". Meng is accused of defrauding HSBC by lying about Huawei's business interests in Iran, conducted through a company called Skycom, which potentially exposed the bank to the risk of breaching US sanctions on the country. Addario said the US record of the case left the court with the impression that as a result of a 2013 meeting between Meng and "Witness T", an HSBC banker in Hong Kong, the bank believed Skycom had been sold by Huawei to an arm's-length third-party company. But Addario said that "Peter Z", another HSBC banker who managed the relationship with Huawei, "fully knew" that Skycom had been sold to a company called Canicula Holdings, whose accounts were still controlled by Huawei. "The risk committee at the bank relied on Peter Z," said Addario, and US claims otherwise were "very misleading as it underplays what [he] told the global risk committee," referring to the bank group that decided to continue working with Huawei in 2014. Meng Wanzhou, chief financial officer of Huawei Technologies, arrives at the Supreme Court in Vancouver on Monday. Photo: Bloomberg alt=Meng Wanzhou, chief financial officer of Huawei Technologies, arrives at the Supreme Court in Vancouver on Monday. Photo: Bloomberg "Canicula was no mere third party, it was a non-arm's-length affiliate whose bank accounts were managed by Huawei," said Addario. In addition to Peter Z, "plenty of other people at the bank" were aware of this, he said, and it was "never a secret". In HSBC emails, Skycom and Canicula were consistently referred to as "Huawei accounts", Addario said. Holmes suggested that a fraud could be committed against a bank, even if its staff "lower down the hierarchy" understood the fraud or had information about it. Addario responded that Peter Z "was far more than a gofer, he was the primary conduit of information" between HSBC and Huawei. "Either he's lied to the global risk committee ... or he's told them the truth and the requesting state has not told you the truth," Addario told Holmes, adding that "either way the evidence should be in front of you." During his remarks, Addario initially identified both Peter Z and Witness T by their full names, prompting the Crown to complain; Holmes immediately imposed a publication ban on their full names. Canadian government lawyers say the proposed new evidence should be rejected, saying it "does not affect the reliability of the ROCs [records of the case]"; instead, they say, it represents arguments against the US charges, not Meng's extradition. "Considering competing inferences, or whether a person may have a defence to the allegations, is not this court's responsibility but is reserved for the trial court in the United States," they say in a written submission. US prosecutors want Meng to face trial in New York; Meng denies the fraud claims. The allegations that Meng is the victim of an abuse of process and that she was a pawn in Trump's trade war with China have hung over the extradition case since she was arrested at Vancouver's airport on December 1, 2018, throwing China's relations with Washington and Ottawa into disarray. The suspicions were highlighted 10 days later when Trump told the Reuters news agency he would "certainly intervene" in the case if it helped strike a trade deal with China. Meng's lawyers said this and other remarks by US officials showed the case was politically tainted. Canadian government lawyers, acting on behalf of US interests in the extradition case, say the entire argument is moot because Trump is no longer president. They have called the argument weak and "hyperbolic". Hearings in the Vancouver extradition case are expected to continue until May 14, but appeals could drag proceedings out for years. Meng, who is Huawei's chief financial officer and the daughter of company founder Ren Zhengfei, is living under partial house arrest at a C$13 million (US$10.2 million) home she owns in Vancouver. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.