|Bid||689.40 x 0|
|Ask||689.60 x 0|
|Day's Range||683.20 - 691.00|
|52 Week Range||514.20 - 742.60|
|Beta (3Y Monthly)||0.82|
|PE Ratio (TTM)||43.36|
|Forward Dividend & Yield||0.17 (2.53%)|
|1y Target Est||N/A|
Aug.25 -- Mayank Mishra, global FX and macro strategist at Standard Chartered Bank, discusses today’s yuan fixing rate and his calls on Asian currencies. He speaks on “Bloomberg Markets: China Open.”
India unveiled a $20bn package of corporate tax cuts on Friday sparking the biggest one-day jump in Bombay’s stock market in a decade, as the government of Narendra Modi looks to revive economic growth ...
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Standard Chartered Bank Korea Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
(Bloomberg) -- Singapore saw its lead over Hong Kong shrink to just a whisker in the battle to be Asia’s biggest foreign-exchange currency hub. To keep its advantage, the island state wants to attract more companies to set up electronic trading platforms.Average daily trading in Singapore jumped 22% to a record $633 billion in April from the same period in 2016, according to the latest survey by the Bank for International Settlements. That’s just ahead of Hong Kong’s $632 billion, as the Chinese city saw a 45% surge in daily transactions.Singapore has enticed UBS Group AG, Citigroup Inc, Standard Chartered Plc and JPMorgan Chase & Co. in the past year to set up FX pricing and trading engines so that investors can reduce the time lag from routing trades elsewhere. That’s helped it take market share from Japan, while competing against Hong Kong that’s at the forefront of the yuan market.The Southeast Asian nation will need another three to five major players to build electronic trading platforms to achieve “critical mass” over the next year, according to Benny Chey, assistant managing director of development and international at the Monetary Authority of Singapore.“We have confidence that we’ll get those players as we’re already in discussions with them,” Chey said in an interview, without disclosing their identities. “Growth of trading in Asian and other emerging-market currencies will be an increasingly important market driver for Singapore.”The latest data from BIS showing a neck-to-neck race between the two rival financial centers also reflected a surge in trading of the Hong Kong dollar that month as bears were squeezed when borrowing costs suddenly advanced.“The increases in FX turnover were mainly due to hedging and arbitrage trades of clients, as well as increased hedging and funding needs of financial institutions,” the Hong Kong Monetary Authority said in an emailed response to questions. “The 2019 BIS survey results reaffirmed Hong Kong’s status as a major international financial center.”Read: Hong Kong Dollar Jumps the Most This Year as Bears Face SqueezeBIS data showed that Japan’s share of global FX trading in April dropped to 4.5% from 6.1% in 2016. Sales desks from five locations -- the U.K., U.S., Singapore, Hong Kong and Japan -- intermediated 79% of the world’s total daily currency trading.The increase in FX trading in Singapore was broad based, with growth seen in Group-of-10 currencies and emerging-market ones such as the South African rand and Mexican peso. The U.S. dollar, yen, euro, and the Australian and Singapore dollars were the most-traded currencies in the island state, the data showed.Singapore has been offering tax incentives and government grants to boost trading. Family offices are also a focus for Singapore’s central bank, according to MAS’s Chey. “The wealth accumulation and need to transfer wealth from one generation to another will help growth,” he said.Family WealthThe number of Asian billionaires will rise by 27% to 1,003 between 2018 and 2023, making up more than a third of the world’s total billionaire population, according to a March report by Knight Frank LLP.“We just need another three big players -- say Goldman, Commerzbank and HSBC for example -- and the floodgates should open,” said Wong Joo Seng, chief executive officer of currency-platform provider Spark Systems Pte, which got financial support from MAS to set up in Singapore.The heart of the challenge for Singapore is latency -- the 10th of a second extra it takes to route an order through servers in Tokyo or London or New York, where most major banks have sited their trading engines. To capture big-volume players, the government needs to persuade companies to build those expensive systems and data centers in Singapore.Citigroup, the world’s joint biggest forex trading group by market share, will provide liquidity through its Singapore FX trading engine in October. It’s also investing in a second data center, said Mark Meredith, Citi’s London-based global head of electronic trading for FX and local markets.Singapore is the fourth FX trading hub for Citi, which also has systems set up in Tokyo, New York and London.“It’s an environment that supports an increasing amount of e-commerce activity,” Meredith said of Singapore. “There’s the growth of wealth in Asia and high-net-worth individuals situated there as well.”While Singapore and Hong Kong have seen increased trading, both cities still lag significantly behind the U.K. and U.S. where investors exchange $3.58 trillion and $1.37 trillion respectively each day, according to BIS data.“Hong Kong’s growth reflects still flourishing financial activities in the Hong Kong dollar market, including IPOs and debt financing over the past few years,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank Ltd. “Growing integration between Hong Kong and mainland China could also be a source of growth in HKD trading activities.”Standard Chartered Bank is looking to build an exact replica of its FX hubs found in Tokyo, New York and London in Singapore, supporting the trading of 130 currencies, according to Michele Wee, the head of financial markets for Singapore at the lender.“We have a lot of new entrants into the market who are having conversations with us on co-locations,” Wee said of Singapore’s development as an FX hub. “It’s a work in progress.”(Adds trading market share in eighth paragraph.)\--With assistance from Gregor Stuart Hunter.To contact the reporter on this story: Ruth Carson in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Tan Hwee Ann at email@example.com, Brett MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The launch of new online-only banks in Hong Kong is expected to be delayed in part due to anti-government protests in the city, people with direct knowledge of the matter said. Most of the eight newly licensed digital banks in Hong Kong, including joint ventures involving Standard Chartered and Bank of China Hong Kong, had aimed to begin operating before the end of 2019. Some of these so-called virtual banks had aimed to launch brand promotion campaigns as early as this month, but these plans have now been put off, the people said, on condition of anonymity give the sensitivity of the matter.
(Bloomberg Opinion) -- Ever wonder why some global banks are still failing in the fight against money laundering? An account of Standard Chartered Plc’s latest shortcomings is a stark reminder of how much needs to improve in the industry.A review by Dubai regulators of the London-based emerging markets lender found that it wasn’t able to prove how some of its wealthy clients had made their money — not an uncommon position for banks to find themselves in. Astonishingly, though, StanChart was also found in some cases to have lacked even the most basic details for rich customers such as their current addresses and phone numbers, Bloomberg News reported.As a result the bank is reviewing (with the help of Deloitte LLC) all of the 8,000 or so clients at its private banking unit, which oversees about $65 billion of money. As my Bloomberg News colleagues noted, collecting some of that information won’t be easy; it means gathering paperwork from long ago that may never have existed in the first place.It’s no great surprise that yet another major financial institution is struggling to vet clients. From Deutsche Bank AG to the Dutch-based ING Groep NV, plenty of others have been scolded by regulators for similar. But the procedures at StanChart’s private bank appear to be flawed to a troubling degree for anyone hoping to make it more difficult for people to misuse the banking system.Regulators expect lenders to know who their customers are, with good reason. How can you be truly serious about detecting illicit money flows otherwise? When banks fail to have adequate processes for even basic stuff like this, you wouldn’t be surprised by more big fines for the industry further down the line.StanChart has been in trouble before, paying a $1.1 billion settlement to U.S. and U.K. regulators over its handling of transactions that violated economic sanctions on Iran. Britain’s Financial Conduct Authority, which imposed a 102 million-pound ($127 million) fine on the bank as part of that settlement, cited anti-money laundering breaches at StanChart’s network of correspondent banks (which provide services on a lender’s behalf) and its branches in the United Arab Emirates.In one incident StanChart took cash from a suitcase with “little evidence” of the money’s origin being examined, according to the FCA. It’s not clear whether the private bank was included in that FCA review or if the parent might be exposed to any more penalties, but Bloomberg News said there was no evidence that the private bank had been involved in wrongdoing.Yet this is a company that has been under scrutiny for years. When StanChart was found to be moving billions of dollars through the U.S. on behalf of Iranian clients in 2012, it agreed to have an outside monitor as part of a deferred prosecution arrangement. Bill Winters, the bank’s chief executive officer, vowed to overhaul the firm’s compliance processes and to root out bad habit when he took over in 2015. That the bank is still addressing what appear to be fundamental errors is a concern.Knowing your customer, or “KYC” in the jargon of tackling dirty cash, is at the heart of the effort to prevent criminals from accessing the financial system. Without it there’s little hope of the industry ever starting to get to grips with the $2 trillion-a-year money laundering problem, let alone being able to preempt how and where criminals will attempt to move their funds next. There are still too many weak links connecting key parts of the global banking network.To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Standard Chartered Plc, fined billions of dollars since 2012 for regulatory violations, has discovered that it cannot explain how some of its wealthiest clients acquired their fortunes and is reviewing thousands of customer accounts at its private bank.A Dubai regulatory review two years ago, which hasn’t previously been reported, found that the private bank didn’t have documentation to show the sources of some clients’ wealth and in some cases lacked even basic data such as current addresses and phone numbers, according to people familiar with the situation. Similar failings have been identified at major hubs including Singapore, Hong Kong and London, the people said.This isn’t the first failure of the bank’s anti-money-laundering efforts. In April, Britain’s financial watchdog fined the lender 102 million pounds ($127 million) for “serious and sustained shortcomings” in its client due diligence and monitoring, including in the United Arab Emirates between 2009 and 2014. That was part of a $1.1 billion settlement with U.S. and U.K. regulators that also took Standard Chartered to task over its handling of transactions that violated sanctions against Iran and other countries.“Standard Chartered’s private bank has made tremendous strides over the past few years, in terms of its business performance and equally in setting industry-leading standards for client due diligence,” the company said in an emailed statement.Chief Executive Officer Bill Winters has had to address repeated regulatory missteps at the London-based bank, which gets more than 80% of its profit from Asia. When he took over in 2015, he pledged a root-and-branch review of the firm’s compliance protocols to bring to an end the run of fines the bank had incurred. In 2017, Chief Information Officer Michael Gorriz said the bank was nearly “over the hump” on costly compliance upgrades required to cope with stricter regulations.But the fines keep coming. Last year, two units of the bank were fined about $4.7 million by authorities in Singapore for anti-money-laundering failings over the transfer of client assets from Guernsey to a branch in the Asian city-state.Standard Chartered’s private banking clients include so-called politically exposed persons -- individuals with prominent political or public-sector functions -- such as Middle Eastern royals, and African and Asian politicians. One client was a member of the Saudi royal family arrested in the kingdom’s anti-corruption drive in 2017, one of the people said.The private bank has some $65 billion of assets and accounted for about 4% of the operating income of the firm in the first half. There is no evidence the bank was involved in wrongdoing.Dubai ReviewFollowing the 2017 review, the Dubai Financial Services Authority ordered the bank to bring in external consultants to act as an independent check on the clean-up, two of the people said. The bank hired Deloitte LLC and two years later is hoping to wrap up the process, which involved the remediation of an unidentified number of client accounts. Senior managers, including Didier von Daeniken, global head of the private bank, were scheduled to meet with Dubai regulators this month, the people said.Standard Chartered discovered closely related issues across the business, according to the people. The private bank is currently conducting an internal review of all of its roughly 8,000 customer accounts to ensure that it is fully compliant with anti-money-laundering rules. A team of Deloitte consultants is helping with this work in Singapore and Hong Kong, which account for the largest share of the private bank’s business, the people said.Regulators in many countries require private banks to verify how their wealthy clients acquired their fortunes to help guard against criminals and corrupt businessmen and politicians using the international financial system to launder ill-gotten gains.When it fined the bank earlier this year, the U.K.’s Financial Conduct Authority spelled out the seriousness of the bank’s lapses: “The inadequate due diligence and ongoing monitoring not only exposed SCB to sanctions evasion but also increased the risk of SCB receiving and/or laundering the proceeds of crime.” It specifically cited the bank’s failure to investigate the origin of funds for an account opened with a suitcase filled with 3 million dirhams ($820,000) in cash.The task of bringing the accounts up to the standard required by regulators isn’t easy. As part of the work, relationship managers in the private bank are having to ask some long-standing clients to provide documentation -- such as payslips, details of family inheritances and company structures -- going back decades. Many of them come from countries where that type of paperwork doesn’t exist, the people said.Guernsey, one of the Channel Islands wedged between England and France, is a case in point. After identifying in 2016 what appeared to be an attempt to skirt client reporting obligations, the bank shuttered its business there and told clients it would take six months to transfer their accounts. The bank subsequently discovered multiple source-of-wealth discrepancies in the accounts and three years later about half of the unit’s accounts still aren’t closed, leaving many clients without access to their money, the people said.Other LendersStandard Chartered isn’t the only lender in regulators’ crosshairs. Money-laundering scandals have engulfed some of Europe’s biggest banks and exposed the vulnerability of the financial system. Authorities in Europe and the U.S. are pursuing inquiries into Denmark’s Danske Bank A/S, which said last year that it handled more than 200 billion euros ($221 billion) in potentially suspicious transactions largely originating with clients in Russia and former Soviet states. The Netherlands’ ING Groep NV paid 775 million euros last year to settle a money-laundering investigation by the country’s prosecutor. Both banks admitted to shortcomings in their anti-money-laundering controls and said they were cooperating with regulators to fix them.Even relatively minor infractions can incur the wrath of regulators. This month, HSBC Holdings Plc’s private banking arm was publicly censured and fined $270,000 by the Hong Kong Securities and Futures Commission for failing to record about 6,000 client telephone calls. The bank said it had since fixed the problem and strengthened its processes.While many of the failings at Standard Chartered date back as far as the 1980s, ongoing reviews of new clients, known as control sample tests, continue to turn up some breaches, two of the people said.Standard Chartered says it plans to increase the size of its private bank, which offers investment, credit and wealth planning services to high-net-worth individuals around the world. “Having achieved a pre-tax profit of $100 million for the first half of this year and a return on tangible equity of 15.7% our growth trajectory is clear, and we are committed to growing safely and sustainably,” the bank said in its statement.The private bank had a $14 million pre-tax loss in 2018 following a $1 million loss the year before.To contact the reporters on this story: Harry Wilson in London at firstname.lastname@example.org;Gavin Finch in London at email@example.com;Ambereen Choudhury in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Alan Katz at email@example.com, Robert FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Britain's new system of banker accountability has led to a "tangible" improvement in culture but modest changes are still needed, UK Finance said on Tuesday. The trade body for banks in Britain published the sector's first major appraisal of the senior managers and certification regime (SMCR) introduced in 2016 as part of reforms implemented after the 2007-09 financial crisis that left taxpayers to bail out lenders while few individual bankers faced punishment. SMCR makes it easier for regulators to pinpoint blame when things go wrong.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. China’s central bank said it will cut the amount of cash banks must hold as reserves to the lowest level since 2007, injecting liquidity into an economy facing both a domestic slowdown and trade-war headwinds.The required reserve ratio for all banks will be lowered by 0.5 percentage points, taking effect on Sept. 16, the People’s Bank of China said on its website Friday. The PBOC also cut the reserve ratios by one percentage point for some city commercial banks, to take effect in two steps on Oct. 15 and Nov. 15.The cuts will release 900 billion yuan ($126 billion) of liquidity, the PBOC said, helping to offset the tightening impact of upcoming tax payments. That is more than the previous cuts in January and May, which released 800 billion yuan and 280 billion yuan, respectively, the PBOC said at those times.The shift is aimed at supporting demand by funneling credit to small firms and echoes the earlier cuts this year. While limited, it could also put pressure on the already weakening yuan which may antagonize President Donald Trump. PBOC officials indicated recently they are wary of larger-scale easing measures, and have so far refrained from following the U.S. Federal Reserve in cutting benchmark interest rates.The cut “doesn’t reflect an aggressive easing,” said Zhou Hao, a senior emerging markets economist at Commerzbank AG in Singapore. “In fact, China has recently massively tightened property financing. Hence this is still a re-balancing -- to lower the funding costs for the manufacturing sector but tighten liquidity in the property sector due to asset bubble concerns.”The Stoxx Europe 600 Index and S&P 500 futures extended gains after the announcement. The offshore yuan gained 0.35% to 7.1128 a dollar as of 6:30 p.m. in Beijing.China’s economy softened again in August after poor results in July, and will likely deteriorate further in the remainder of the year. Trade tension between China and the U.S. expanded onto the financial front recently after China allowed the currency to decline below 7 a dollar, prompting the U.S. to name it a currency manipulator.What Bloomberg’s Economists Say..“The PBOC has also gained more room for monetary easing, as the spread between U.S. and China 10-year government bond yields hovers near its highest level since 2018. The depreciation of the yuan also gives the PBOC more flexibility in performing monetary policy.”David Qu, Bloomberg EconomicsTo read the full note click hereThe central bank emphasized that the policy change wasn’t a massive step up in easing.“The cut is not flooding the economy with stimulus and the stance of prudent policy has not changed,” it said in a separate statement. The RRR cut will offset the tax season in mid-September, and the overall liquidity in the banking system will stay basically stable, according to the PBOC.‘The cuts don’t mean significant easing in monetary policy,” said Ding Shuang, chief China and North Asia economist at Standard Chartered Bank Ltd. in Hong Kong. “Rather it is something they must do, a sort of marginal easing, in order to prevent tightening in monetary policy.”(Updates with comment, more details from the statement.)\--With assistance from Miao Han.To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeffrey Black at email@example.com, James MaygerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Petr Kellner no doubt knows his timing is awful. The Czech Republic’s richest man, who controls multiple telecom firms at home and a bank in Russia, Kellner has been feeding China’s consumption habit by giving out small-value unsecured loans for over a decade.But it’s only now, when Beijing is fighting a trade and technology war on one hand, and trying to deflate a domestic credit bubble on the other, that his Home Credit BV has decided to go public. And of all possible IPO venues, Kellner has chosen Hong Kong, which has of late resembled more of a war zone between protesters and police than a thriving center of global finance. Amid skittish investor sentiment, brewer Anheuser-Busch InBev AB scrapped its Asian unit’s $9.8 billion flotation in July; Alibaba Group Holding Ltd. delayed its much-awaited $20 billion Hong Kong listing. Yet if you leave aside bad timing, Home Credit’s move has substance. The consumer finance firm, part of Kellner’s PPF Group NV, offers point-of-sale loans – think installment loans on fridges, TVs and smartphones at a store or online – as well as cash loans to borrowers who often don’t have bank accounts. Home Credit is looking to raise as much as $1 billion, Bloomberg News reported. If all goes well, a listing is possible in the next month or so.China accounts for nearly 63% of Home Credit’s loan book, though what it has outside the mainland isn’t insignificant. Its moat in Indonesia, Vietnam and the Philippines rivals the 30% share of the point-of-sale loan market it has closer to home in Eastern Europe and Russia and the 28% it commands in China.Even within China, Home Credit has protections. It’s not in the dreaded peer-to-peer lending space that Beijing has restricted after a spate of high-profile fraudsters bilked investors. Home Credit raises funds from banks and securitizing future cash flows, not from yield-starved individuals looking for quick returns. (It has its own bank licenses in Russia, Kazakhstan and the Czech Republic.)Home Credit has been China since 2007, old in consumer-finance terms, and was given a nationwide lending license in 2013. As one of the 27 licensed consumer-finance firms in China, it has access to the People’s Bank of China’s credit reference center. It’s not perfect and excludes a lot of online lending, but remains a useful guide to consumers’ credit history.There are pitfalls, including a sharp slowdown in economic growth in both China and India. Beijing's crackdown on the runaway consumer finance industry soured the lender's nonperforming credit ratio there to 9.7% by the end of 2018, though it has stabilized since. Borrowers under pressure to repay loans they took out elsewhere defaulted on their Home Credit obligations. Then there’s competition, especially from the likes of Alibaba Group Holding Ltd. and other fintech. Home Credit raises ticket size and tenor for better customers as it learns more about their creditworthiness. China's internet giants can probably learn just as much, and more quickly, without risking a single dollar. It will be a challenge to maintain an impressive 2.6% return on assets and a near 20% return on equity in the face of competition from machine learning and big data.The geopolitical risks are also crucial, with the U.S.-China trade war as a backdrop. The Czech Republic is a beachhead of Chinese President Xi Jinping’s Belt and Road project in Eastern Europe. Czech President Milos Zeman, eager to build ties, took Kellner to a meeting with Xi in 2014. But after the Czech cyber watchdog warned in December that Huawei Technologies Co. represented a threat to national security, the Chinese vendor is losing orders in the country. PPF Group’s Czech phone companies are under pressure to avoid using Huawei to develop its 5G network, Bloomberg News reported in March. It’s unclear whether fraying Chinese-Czech friendship will affect Home Credit. For now, it’s in a better place than the other big consumer lender owned by a foreigner: Dianrong, a P2P platform run by Soul Htite, co-founder of San Francisco-based LendingClub Corp. Earlier this year, the company, backed by Tiger Global Management and Standard Chartered Plc, cut thousands of staff and closed stores to comply with Beijing’s efforts to shrink the industry.China began cleaning up the P2P industry two years ago and asked players to register. So far, none, including Dianrong, seem to have received an approval. Without that registration, Lufax Holding Ltd., China's biggest P2P lender, is unlikely to list anytime soon. A different business model means Home Credit isn’t a bad play, whatever Kellner’s timing.To contact the authors of this story: Nisha Gopalan at firstname.lastname@example.orgAndy Mukherjee at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The effort to stop a former U.S. Justice Department official from representing Huawei is another step in a broader U.S. government campaign against the Chinese company, a lawyer for Huawei argued on Wednesday. Lawyer Michael Levy said the company has not been given any material information as to why its counsel, James Cole, should be removed. Cole is Huawei’s lead lawyer in the U.S. case against the world's largest telecommunications equipment maker for allegedly misleading global banks about its business in Iran.
HSBC completed its first yuan-denominated blockchain letter of credit transaction, according to a Sept. 2 Reuters report, taking a step forward in its use of the Voltron platform, developed jointly with other large financial institutions. “The exchange of the electronic documents was completed in 24 hours, compared to the typical five to 10 days for conventional document exchange,” an HSBC representative told Reuters. “We are hoping that we will have something by end of the year, maybe the first quarter of next year," said Ajay Sharma, HSBC regional head of global trade and receivables finance in the Asia-Pacific.
Investing.com -- Europe's stock markets surged in early trading and Hong Kong's rose by the most since 2011 after a report claiming that the head of Hong Kong's legislative assembly would formally withdraw a controversial bill which sparked three months of protests.
The time-honoured traditions of Cantonese opera form the backdrop of a brand new set of HK$100 notes to be launched in Hong Kong on Tuesday.The city's note-issuing banks, HSBC, Standard Chartered and Bank of China (Hong Kong), have come up with their own designs to capture the spirit of the hugely popular ancient art form on the new-look banknotes.The notes, available at bank branches from Tuesday, bear characters and scenes evoking the celebrated musical stage shows, including a princess in a Chinese wedding gown and young lovers in a garden.Bank of China (Hong Kong)'s design features a single beautiful young lady in traditional opera costume. Photo: K. Y. Cheng alt=Bank of China (Hong Kong)'s design features a single beautiful young lady in traditional opera costume. Photo: K. Y. Cheng"Among the current series of banknote designs, I particularly like the HK$100 banknote because it features the Cantonese opera, which is a very traditional Hong Kong culture and popular performing art," said Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority.In Hong Kong, it is the de facto central bank that decides security features of paper currency, but the three note-issuing banks came up with the designs.Chan hosted a launch ceremony for the new HK$100 banknotes, attended by the chief executives of the three lenders, at the Xiqu Centre in West Kowloon Centre. It featured a 20-minute live performance of Cantonese opera by local young artists.Romance featured heavily in the designs of the new banknotes.HSBC's note shows a couple of young lovers meeting in a Chinese garden, while Standard Chartered opted for a princess in a Chinese wedding gown with her new husband. BOCHK kept it simple, with a single beautiful young lady in traditional opera costume."Love stories are an important theme of many Cantonese operas, which is why we chose the young lovers as our theme," said Diana Cesar, chief executive of the Hong Kong office of HSBC, at the ceremony. Dispelling 5 common misconceptions about Cantonese opera"Cantonese opera continues to thrive in Hong Kong, attracting young people to learn and appreciate the art. This theme, beautifully captured in watercolour before being converted into engravings, expresses HSBC's connection with the Hong Kong community and our shared heritage."Standard Chartered's princess and husband are based on two young Hong Kong artists, according to Mary Huen Wai-yi, the bank's local chief executive."We want to show the spirit of the young artists. The show must go on, and we need young artists to continue the show," said Huen.BOCHK chose to focus on a single young lady as it wanted to show her beauty, said Yu Xin, senior art director of China Banknote Printing & Minting Corporation, who designed many of the bank's themed notes.The designer said the current banknotes have more security features than the ones in 2010.To celebrate its new HK$100 note, HSBC is launching an augmented reality filter in which the user's "selfie" photo taken on a smartphone is turned into a Cantonese Opera character.Cantonese opera was listed as an intangible cultural heritage of humanity by Unesco in 2009."This year marks the 10th anniversary of the Unesco inscription of Cantonese opera, making the launch of this banknote all the more meaningful," said Gao Yingxin, vice-chairman and chief executive of BOCHK.Forthcoming themes in the banknote series include butterflies which will adorn the HK$50 note and yam-cha " the tea and dim sum culture " that will appear on the HK$20. Both are due to be launched in early 2020.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 © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
(Bloomberg) -- China’s high-profile campaign to funnel more credit to private companies has stalled according to a number of private surveys and reports, adding to concerns over the nation’s decelerating growth.The credit confidence of small and medium enterprises began to tumble in April and is now below its level in October, when President Xi Jinping proclaimed his “unwavering support” for private companies, according to a Standard Chartered Bank Plc survey. Without further government action, private firms may be “heading for another liquidity crisis,” says research firm Gavekal Dragonomics in Beijing.Xi championed the effort to funnel credit to more efficient private companies in an attempt to bolster an economy struggling amid the trade war with the U.S. and a campaign to curb financial risks, especially in the $9 trillion shadow banking system. Its lack of traction is a set back for policy makers striving to rev up new growth engines, with borrowing costs stubbornly high even after the government set a goal of lowering them by 1 percentage point this year.“Regulators must either ease up on the shadow credit crackdown, or create more effective incentives for banks to seek out and lend to private firms,” Thomas Gatley, an analyst at research firm Gavekal Dragonomics, wrote in an Aug. 21 note. “At present, neither of these options seems to be on the table, and the likelihood of another liquidity crisis for the private sector is on the rise.”The campaign to channel more lending to private companies started well and the Standard Chartered Small and Medium Enterprise Confidence sub-index for credit reached a 16-month high in March. But since then, attempts to funnel more credit to the private sector have collided with banks’ reluctance to lend to higher-risk private companies amid a decelerating economy that’s headed for its slowest growth in almost 30 years.China is grappling with a trilemma as it strives to fund state-owned enterprises, get more credit to private companies and also deleverage the economy, says Derek Scissors, chief economist at the China Beige Book International in Washington.“It’s impossible to do all three and supporting state enterprises is inviolate under Xi,” he says.Small and medium size companies’ borrowing costs have also risen since the second quarter, according to the Standard Chartered survey. That’s likely because the big five state-owned banks met their lending targets in the first half of the year, leaving smaller banks with higher funding costs to take up the slack, according to Ding Shuang, chief China and North Asia economist at Standard Chartered Bank Ltd. in Hong Kong.A corporate financing sub-gauge of business sentiment survey compiled by the Cheung Kong Graduate School of Business has also tumbled since a high in April.A contrary indicator comes from the central bank, which says loans for “inclusive financing to small and micro-sized enterprises” surged 22.5% in the first half from a year earlier. Gavekal’s Gatley says the measure is a “poor guide,” noting that last year the central bank discontinued a broader measure of “small and micro enterprises” lending without explanation.To get more credit to private companies, policy makers must take measures including more targeted cuts in the required reserve ratio to reduce funding costs that can be passed to private companies, says Ding.The introduction this week of the more market-driven loan prime rate as a new reference rate for pricing loans is intended to improve interest-rate transmission. Former central bank official Sheng Songcheng wrote in the central-bank backed Financial News that it’s likely small and micro-sized quality companies will benefit more than others.The central bank will nonetheless skip a chance to cut borrowing costs in the coming days, holding off on clear-cut monetary easing for now as it lets a recent overhaul of the interest-rate system bed in, according to a Bloomberg survey.“The positive side is the government still emphasizes directing more loans to small and medium enterprises,” says Ding. “Usually when they talk about that it will be matched by actions.”(Updates with borrowing costs survey in the penultimate paragraph.)\--With assistance from Yinan Zhao.To contact Bloomberg News staff for this story: Kevin Hamlin in Beijing at email@example.comTo contact the editors responsible for this story: Jeffrey Black at firstname.lastname@example.org, James Mayger, Jiyeun LeeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Egypt cut interest rates for the first time in six months as slowing inflation and a stable currency allowed the central bank to shrug off the risk of contagion from an emerging-market selloff.The Monetary Policy Committee reduced its benchmark deposit rate by 150 basis points to 14.25% and its lending rate to 15.25%, the bank said Thursday in a statement. Ten of 12 analysts surveyed by Bloomberg had predicted a cut of at least 100 basis points.“As incoming data continued to confirm the moderation of underlying inflationary pressures, the MPC decided to cut key policy rates,” the central bank said. “This remains consistent with achieving the inflation target of 9%, plus or minus 3 percentage points, in 2020 Q4 and price stability over the medium term.”The move may boost what’s already the fastest economic growth in the Middle East, while a favorable inflation outlook means it’s unlikely to dim Egypt’s allure as one of the most profitable carry trades in emerging markets, even as a U.S.-China trade war hits assets elsewhere.“It’s higher than expected and will be well received by the markets,” Mohamed Abu Basha, head of macroeconomic analysis at Cairo-based investment bank EFG-Hermes, said of the reduction. “Another cut of maybe 100 basis points will start to trigger the capital expenditure cycle and encourage businesses to start investing,” he said.The Arab world’s most populous country has been on a mission to tame inflation stemming from a late-2016 devaluation of the pound and other measures enacted to secure a $12 billion loan from the International Monetary Fund and revive the economy after years of turmoil.Headway Against InflationInflation figures for July showed it’s made headway: the annual rate hit 8.7%, the lowest in four years, even after a recent reduction in fuel subsidies that carried the risk of stoking price rises. Analysts say the rate will likely remain below 10% for the rest of 2019 as the statistical effect of last year’s spike fades.The move may set the stage for further rate cuts before the end of the year, analysts said.“We deem necessary a second consecutive cut in policy rates, to mark the resumption of a monetary easing cycle,” Cairo-based investment bank CI Capital said in a note. “A one- and-done rate cut would cast high doubts on the economic outlook, and disappoint both local and global investors.”The central bank said “the pace and magnitude of future policy rates adjustment will continue to be subject to confirmation that inflation expectations are anchored at target levels that are consistent with disinflation and price stability over the medium term.”Real InterestEven with Thursday’s reduction, “Egypt remains one of the highest yielding emerging markets in real terms for offshore investors,” said Bilal Khan, senior economist at Standard Chartered Plc in Dubai. The bank expects “significant additional easing” of up to 400 basis points by June.Cuts of 150 basis points are possible this year and “should not have an impact on foreign appetite for local Treasury instruments,” according to Radwa El-Swaify, head of research at Cairo-based Pharos Holding.Foreigners have been making “very lucrative” returns due to the strength of the Egyptian pound against the U.S. dollar “and the relatively low level of macro and country risk in Egypt compared to other emerging markets,” she said.(Updates with central bank comment on future decisions.)To contact the reporters on this story: Mirette Magdy in Cairo at email@example.com;Tarek El-Tablawy in Cairo at firstname.lastname@example.orgTo contact the editors responsible for this story: Alaa Shahine at email@example.com, Michael Gunn, Paul AbelskyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Hong Kong banks published full-page newspaper ads calling for law and order in the Chinese-ruled city and international jewellers sought the rescheduling of a huge trade fair as weeks of pro-democracy protests showed no sign of let-up on Thursday. Trade representatives of the world’s largest diamond trading centres, from Antwerp, Mumbai and Ramat Gan, asked the organiser of the high-profile Hong Kong Jewellery and Gem Fair to postpone the event, which typically draws more than 54,000 visitors.
Some of Hong Kong's biggest banks published full-page newspaper advertisements on Thursday calling for the preservation of law and order in the Chinese territory and condemning violence, as weeks of pro-democracy protests show no sign of abating. HSBC, Standard Chartered and Bank of East Asia, which published the advertisements in major newspapers in the Asian financial hub, all urged the restoration of social order. Thousands of Hong Kong residents held an anti-government protest on Wednesday at a suburban subway station where demonstrators were attacked by a mob of white-shirted men last month.
(Bloomberg) -- Huawei Technologies Co. used code names and secret subsidiaries to conduct business in Syria, Sudan and Iran, the U.S. alleged in the extradition case related to sanctions violations against the company’s chief financial officer.The Chinese networking giant allegedly operated a de facto unit called DirectPoint in Sudan and Canicula in Syria, according to documents released this week by a Canadian court. In internal spreadsheets, Huawei also used the code “A5” to refer to Sudan and “A7” to Syria, the U.S. said in the documents submitted to the Canadian government in support of its request for the extradition of company CFO Meng Wanzhou.Huawei operated those units just as it controlled a subsidiary in Iran that obtained American goods, technologies and services in violation of U.S. sanctions, according to the allegations.The U.S. is seeking to extradite Meng -- daughter of Huawei’s billionaire founder Ren Zhengfei -- after accusing her and others at the company of conspiring to trick banks into conducting more than $100 million worth of transactions that may have violated U.S. sanctions. The company has denied it committed any violations. It didn’t respond Wednesday to requests for comment on the allegations in the court documents.“The motivation for these misrepresentations stemmed from Huawei’s need to move money out of countries that are subject to U.S. or EU sanctions -- such as Iran, Syria, or Sudan -- through the international banking system,” the Justice Department said in its request for Canada to arrest Meng as she arrived at Vancouver’s airport last December.The court on Tuesday released hundreds of pages of documents and video footage submitted by Meng’s defense to back its arguments that Canadian authorities deceived her about the true nature of her detention in order to collect evidence for the U.S. FBI.In those documents, the U.S. outlined its case against Meng and its plans for witnesses in the case against her if she is successfully extradited. Among those witness are unnamed executives from HSBC Holdings Plc, Standard Chartered Plc, BNP Paribas SA and Citigroup Inc. that allegedly were misled by Meng and her colleagues into continuing business with Huawei at the time despite the risk of sanctions violations.To contact the reporter on this story: Natalie Obiko Pearson in Vancouver at firstname.lastname@example.orgTo contact the editors responsible for this story: David Scanlan at email@example.com, Andrew Pollack, Peter BlumbergFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It’s hard not to see HSBC Holdings Plc’s exclusion from China’s interest-rate reform as a snub.Hong Kong’s biggest bank wasn’t included in a list of 18 lenders that will participate in pricing for a new loan prime rate that the People’s Bank of China will start releasing Tuesday. The roster includes foreign lenders Standard Chartered Plc and Citigroup Inc., which have smaller China businesses than HSBC.It’s the latest sign that all may not be well in HSBC’s relations with Beijing, after a turbulent period that has seen the departures this month of Chief Executive Officer John Flint and the bank’s Greater China head, Helen Wong. HSBC shares fell 13% in Hong Kong this year through last Friday, compared with a decline of less than 1% in the benchmark Hang Seng Index.London-based HSBC, which is also Europe’s biggest bank, has made China a key plank of its growth strategy. The lender is the third-largest corporate bank in the country by market penetration, according to data provider Greenwich Associates LLC. That places it ahead even of China Construction Bank Corp. and Agricultural Bank of China Ltd., two of the nation’s big four state-owned lenders. Standard Chartered and Citigroup don’t rank among the top five, according Gaurav Arora, head of Asia Pacific at Greenwich.It could be argued that HSBC’s focus on big corporate clients means it’s less attuned to the loan market for small and medium-size enterprises that are the focus of China’s changes to its interest-rate regime. That would be a stretch, though. Corporate banking is a scale game. And even though StanChart may have a greater preponderance of smaller clients, HSBC surely has many similar customers. Citigroup’s inclusion makes more sense: It’s the only U.S. bank in China with a consumer-lending business that spans credit cards to SME loans. The list also includes less influential domestic lenders such as Bank of Xian Co. Those searching for reasons why HSBC may have fallen into China’s bad books may point to Huawei Technologies Co. Liu Xiaoming, China’s ambassador to the U.K., summoned Flint to the embassy earlier this year to interrogate him over the bank’s role in the arrest and prosecution of Meng Wanzhou, the chief financial officer of Huawei, the Financial Times reported Monday. The then-CEO told him HSBC had no option but to turn over information that helped U.S. prosecutors build a case against Meng, the FT said. On Aug. 9, an HSBC spokeswoman denied that Wong’s departure as Greater China head was linked to any issue involving Huawei, pointing out that she announced her resignation before Flint’s departure. Still, the bank has faced criticism in China’s state-owned media over its role in the case. The way HSBC helped the U.S. Department of Justice acquire documents concerning Huawei was unethical, the Global Times reported previously, citing a source close to the matter. The bank was likely to be included in China’s first “unreliable entity” list of companies that have jeopardized the interests of Chinese firms, it said.The timing of China’s interest-rate snub won’t do anything to quell jitters, coming a day after Cathay Pacific Airways Ltd. CEO Rupert Hogg resigned amid criticism from Chinese regulators over its stance on employee participation in Hong Kong’s protests. Beijing is becoming more muscular in its attitude to the city’s unrest and foreign-owned businesses aren’t being spared. In an increasingly politicized environment, even a business that’s been around for 154 years will have to tread carefully. To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Britain's Office of Financial Sanctions Implementation, which includes police and intelligence officers as well as finance ministry officials, has notified the lender that it aims to impose a penalty of more than 10 million pounds ($12 million) on the bank in coming weeks, Sky News said. Sky News provided no further details. The bank agreed in April to pay $1.1 billion to U.S. and British authorities for conducting illegal financial transactions that violated sanctions against Iran and other countries.