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U.S. judge orders 15 banks to face big investors' currency rigging lawsuit

A U.S. judge on Thursday said institutional investors, including BlackRock Inc <BLK.N> and Allianz SE's <ALVG.DE> Pacific Investment Management Co, can pursue much of their lawsuit accusing 15 major banks of rigging prices in the $6.6 trillion-a-day foreign exchange market. U.S. District Judge Lorna Schofield in Manhattan said the nearly 1,300 plaintiffs, including many mutual funds and exchange-traded funds, plausibly alleged that the banks conspired to rig currency benchmarks from 2003 to 2013 and profit at their expense. "This is an injury of the type the antitrust laws were intended to prevent," Schofield wrote in a 40-page decision.

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  Big Banks Must Face Forex Manipulation Claims,Judge Rules

  Bloomberg
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  15 US Banks Facing Currency Rigging Lawsuit Brought By Large Investors

  Benzinga

HSBC Intends to Acquire Remaining Stake of German Division

HSBC Holdings (HSBC) poised to take control of German unit by buying the remaining stake.

China Isn’t Using Its Currency as a Cold War Weapon

(Bloomberg Opinion) -- The deterioration of U.S.-China relations is fast and furious, with Washington throwing out accusations of unfair trade practices, unlawful technology transfer and an early cover-up of the coronavirus outbreak, which has claimed over 100,000 American lives. The Chinese yuan, this year’s beacon of stability, is now is now at risk of tumbling like other emerging markets currencies.On Wednesday, the offshore yuan, which trades freely, flirted with its weakest level on record, dropping as much as 0.7% to 7.1965. While Thursday morning’s yuan fix came in stronger than expected, the overall sentiment is downbeat.It’s tempting to theorize that a weaker yuan could become a powerful weapon in the new Cold War, yet there’s little evidence of foul play from the People’s Bank of China. Since mid-2017, the central bank has based its fixing on the previous day’s close, dollar movement overnight against a currency basket, and what it calls the “countercyclical factor," a catch-all metric that grants wiggle room to deviate from market fundamentals. The yuan can move in a 2% trading range around the PBOC’s daily target.Take a look at Goldman Sachs Group Inc.'s estimate of the countercyclical factor. Over the last year, the PBOC has been consistently guiding its yuan stronger, not weaker, to artificially track the dollar. For all the theatrics of getting labeled a currency manipulator, Beijing wasn’t making its exports any cheaper.What’s new this year is the PBOC’s Zen-like attitude. Rather than playing the heroic fireman, handling one crisis after another, the central bank has been largely hands-off. It has used the countercyclical factor in a meaningful way only twice since January, on Feb. 4 when China emerged from the Lunar New Year holiday to face a national lockdown, and at the end of March when the outbreak was shaking up global markets.And why should the PBOC adhere to the dollar anyway? The coronavirus downturn has only showcased America’s exceptionalism — it prints the world’s reserve currency. Haven demand for the dollar has surged, evidenced by soaring currency swap rates from the euro zone to South Korea, and the Federal Reserve’s scramble to re-establish swap lines with other central banks. Looking back to 2008, the greenback only started to weaken two months after demand for “emergency dollars” peaked, data provided by Deutsche Bank AG show.So it makes sense for China to adopt a more enlightened approach, allowing the yuan to weaken during periods of dollar strength, and catch up when global tensions recede. From the PBOC’s view, the trade-weighted yuan is certainly stronger now than it was last fall, when the central bank was in fire-fighting mode. China doesn’t want to spend another $1 trillion of its foreign reserves defending its currency. The rapid drawdown in 2015 and 2016 traumatized the Chinese for good.To be sure, the pressure of capital outflows is still there. Just look at the consistent negative value of the “net error and omissions” figures in China’s balance of payment data. However, here’s the beauty of the virus: The Chinese can’t go anywhere. They can’t come to Hong Kong to buy insurance products, and unless you’re ultra-rich (with private bankers around the world apartment-hunting for you), Manhattan real estate is off-limits. The PBOC has less to worry about than before.So now the market can test the true value of the yuan. It could easily drop below 7.30 if the phase one trade deal breaks down and the Trump administration imposes some of the tariffs it had previously threatened, estimates HSBC Holdings Plc.Long-time China bear Kyle Bass abandoned his yuan short in early 2019 for the greenback-pegged Hong Kong dollar. He didn’t profit from his yuan trade because the PBOC established powerful tools, such as selling yuan-denominated bills in the offshore market, to kill anyone betting against the currency. Now that their interests are becoming aligned, it’s time for the bears to wake up.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

HSBC Launches First Equity Index Products Powered by AI and Big Data

HSBC today announced the launch of the AI Powered US Equity Index (AiPEX) family, the market’s first to use AI as a method for equity investing

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  Futurism Partners With IBM Security

  Newsfile
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  Vizient Inc. Partners with IBM Watson Health to Help Support Healthcare Providers’ Performance Improvement Needs

  Business Wire

HSBC Board Pressures Executives to Deepen Restructuring

To cope with the economic fallout of the pandemic, the board of HSBC wants executives to deepen restructuring efforts, which may include further job cuts.

Here's How P/E Ratios Can Help Us Understand Weibo Corporation (NASDAQ:WB)

Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll apply a basic...

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  What Is Cue Energy Resources's (ASX:CUE) P/E Ratio After Its Share Price Rocketed?

  Simply Wall St.
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  Do You Like Lonza Group Ltd (VTX:LONN) At This P/E Ratio?

  Simply Wall St.

HSBC Takes Full Control of German Unit With Landesbank Deal

(Bloomberg) -- HSBC Holdings Plc is taking full control of its German business as Europe’s largest lender restructures its global operations in smaller markets, and targets Asia for growth.The bank will acquire an 18.66% stake in HSBC Trinkaus & Burkhardt AG from Landesbank Baden-Wuerttemberg, a regional lender in the south of Germany, according to statements by the banks on Monday. They didn’t disclose a price.HSBC is pivoting to Asia and planning 35,000 job cuts amid sluggish revenue in its other markets, especially in continental Europe, though the coronavirus pandemic has put key parts of that program on hold. Net profit in HSBC’s German unit fell almost 17% last year to 98 million euros ($107 million) after the bank recorded a rise in loan impairments.HSBC Trinkaus & Burkhardt had total assets of 26.6 billion euros ($29 billion) and employed more than 3,000 people at the end of last year. It warned in February alongside its full-year results that earnings in 2020 would likely remain “adversely affected” because of the difficult economic backdrop.HSBC will hold 99.33% of the registered share capital after the deal closes, and plans to squeeze out remaining investors. LBBW said the stake it sold in the business was “a purely financial investment,” while London-based HSBC declined to comment further.The bank makes the majority of its revenue and profit in Asia, and announced its revamp in February after pressure from investors to revamp European and U.S. divisions that have held back its performance.HSBC’s planned sale of its French retail bank could take 4,000 to 8,000 workers off its payroll, a person with knowledge of the matter said in October. The lender is also planning to partially exit stock trading in other Western markets, including Germany, the U.S. and the U.K., Bloomberg News had reported.(Adds details throughout of HSBC’s restructuring and German performance)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Why one strategist says these hard-hit stocks will rebound — even if there’s a second wave to the pandemic

One strategist says the economy is better prepared for a new wave of infections — and value stocks are near a point where they will lead the market.

From Goldman's 'Team Blue' to less crowded lifts, banks in Hong Kong are paving the way for a global return to work

As many of the city's lenders prepare to bring back up to half of their staff back to the office in the coming weeks, Hong Kong is shaping up to be a test run for how global banks will fully return after months of engaging in the world's biggest work-from-home experiment.Bankers, fund managers and others who have spent months working remotely at their kitchen tables or from their sofas are discovering a dramatically changed environment in their office homecomings.Staff members at Goldman Sachs are sitting at every other desk at its offices in Central and are divided into "Blue" and "White" teams that rotate between the office and home. At Citigroup, plastic dividers have been installed between seats on the bank's trading desk and other high-density areas, such as retail branches, and a disinfecting robot patrols the lobby at its Kowloon office tower. HSBC turned its three-day China Conference that normally attracts about 1,000 people into a three-week, online-only affair.Even the lifts have been reprogrammed at the International Commerce Centre (ICC) " home to Morgan Stanley and other global lenders " and office towers across the city to limit the number of passengers and amount of time spent crammed inside."Hong Kong may have seen small victories in combating Covid-19 with the recent news on the relaxation of certain social distancing measures by the government," Angel Ng, Citi's chief executive for Hong Kong and Macau, said in a May 18 internal memo seen by the South China Morning Post. "However, we are not out of the woods yet so we should continue to stay vigilant and not let our guard down."The coronavirus, which causes the disease Covid-19, has infected more than 5.3 million people worldwide and forced shutdowns of offices from New York to London to Singapore. Banks shorten annual internship programmes, go virtual amid coronavirusBank employees have been declared "essential workers" in many countries, but financial institutions have embraced remote working to protect their employees and keep their markets and lending operations functioning as the pandemic threatens the global economy.The plans under way to bring more staff back in Hong Kong " some banks had 75 per cent or more of their staff globally working from home in March and April " could be a template for workers returning to the office in other financial centres, such as New York and London.The New York Stock Exchange, for example, is expected to partially reopen its trading floor on May 26, with only about a quarter of floor brokers present. The bourse has engaged in full electronic trading since March 23.But other financial giants, including American Express and Visa, said last week most of their employees globally should prepare to work from home for the remainder of the year.In Hong Kong, banks are taking it slow before returning to office in force. Citigroup increased the number of its staff in the office to 50 per cent on May 20 and Goldman is expected to do the same starting Monday, while HSBC has about 30 per cent of its Hong Kong staff in the office. Many have been rotating employees between home and the office for months and are likely to continue to do so.Morgan Stanley, which has more than half of its employees in Hong Kong in the office, is taking a similar phased and gradual approach to bringing everyone back.The bank's cafeteria on the 47th floor of the ICC began serving fresh food again last month, but continues to restrict how many people can be inside at any one time. The cafeteria has just over one-third of its normal capacity and people waiting in queues are expected to stay 1.5 metres apart.The 108-floor ICC, which is home to offices for Morgan Stanley, Deutsche Bank and Credit Suisse, has tweaked algorithms for the building's lifts to restrict the number of passengers in each car to eight and make fewer stops. The building also has a "staff disinfection tunnel" that sanitises the uniforms and belongings of lobby workers before their shifts and added additional cleaning staff.Stickers mark the spot for people to stand in a lift to maintain social distance amid the coronavirus pandemic. Photo: Xiaomei Chen alt=Stickers mark the spot for people to stand in a lift to maintain social distance amid the coronavirus pandemic. Photo: Xiaomei Chen"I wish I had that magic answer. Unless there's a commercially available vaccine, nobody can say we're safely out of the woods," Donna Chang, Deutsche Bank's chief operating officer for Hong Kong, said. "I think this social distancing and this heightened personal hygiene expectation are here to stay. This is the new normal"Deutsche Bank is entering phase two of its plan to return to the office on Monday, when just over half of its staff will return, Chang said. The bank has provided personal hand sanitisers and asked staff in higher density departments to keep some workstations vacant, she said.The question of whether banks and other large companies will reduce the amount of real estate they use in office towers in central business districts remains an open one.Barclays CEO Jes Staley told reporters last month that the bank was considering potential adjustments to its location strategy and "the notion of putting 7,000 people in a building may be a thing of the past". He said retail branches could serve as alternative sites for investment bankers and others.Jose Vinals, the Standard Chartered chairman, told Bloomberg last month that the bank may rethink its work-from-home practices after the health crisis subsides. About two-thirds of its staff in Hong Kong have returned to the office and all, but one of its more than 70 branches in the city have reopened.As part of its phased return plan. Credit Suisse envisions "large numbers of employees will continue to work remotely in the short-to-medium term," a bank spokeswoman said."We are working closely with local authorities to plan how we can return to the office with control measures in place that complement business continuity with health and safety," she said.Goldman Sachs began phasing employees in Hong Kong back over the past three weeks, but is expected to pause after it reaches a 50 per cent level.Desks are being left empty as the bank has asked all employees to remain at least two metres apart. Goldman also has limited meeting rooms to no more than four persons and asked employees on alternative teams not to intermingle outside work.Like many of its rivals, Citi has instituted temperature checks for all staff at its offices in Central and in Kwun Tong and is requiring the few visitors " in-person visits have been discouraged " to fill out health declaration forms. Staff are being prodded to use video or audio conferences rather than gathering for group meetings.The bank is conducting hourly cleaning of all "high touch" areas, such as lift buttons and door handles, and has a robot that periodically disinfects the lobby at Citi Tower. All staff have been asked to wear masks in the office, maintain a two-metre distance from colleagues, not co-mingle with employees from other offices in the city and stagger their commutes and lunch breaks.No more than five people can take the lift at a time at Citi Tower and dots on the floor of the car indicate where people should stand " the lifts normally have the capacity to carry up to 18 people.The bank also has placed an antibacterial polymer coating, known as MAP-1, developed by researchers at the Hong Kong University of Science and Technology in public areas, according to Duncan Macintyre, head of Citi Realty Services, Hong Kong and Macau. The coating is refreshed every 90 days.JPMorgan Chase had about 30 per cent of its staff back in its Chater House offices in Central beginning May 11. Some meeting rooms are limited to as few as two people and there are signs on tables indicating certain seats are off limits to encourage social distancing: an image of an office chair with a slash across it.HSBC has reduced seating to encourage social distancing at its staff canteen at its headquarters in Central. Photo: Handout alt=HSBC has reduced seating to encourage social distancing at its staff canteen at its headquarters in Central. Photo: HandoutEmployees are required to wear face masks in the office and the building's landlord is managing lift capacity and traffic flow in the lobby.JPMorgan plans to keep its offices at half capacity or less globally for the "foreseeable future" as it prepares to bring more of its staff back, Bloomberg News reported on May 20, citing an internal memo.HSBC, one of three lenders authorised to issue currency in Hong Kong, has reopened all but two of its more than 100 branches and business centres in the city " the two that remain closed are at the airport " and about 30 per cent of its office staff have returned to their desks.Clients are encouraged to wear masks when they visit HSBC branches and offices and hand sanitiser is available for customer use. The reopened staff canteen on the basement level of the bank's main building in Central has reduced its seating by one-third."The current situation has nudged us to think of alternate ways of engaging clients," Justin Chan, head of greater China for global markets at HSBC, said regarding the all-virtual China Conference this year. "While it's too early to say if this will be the new normal, the virtual conference format has proved to be effective and successful."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 © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

Thanks to mahjong and poker, HSBC's e-wallet hits new milestone on pandemic-driven surge in online payments

HSBC's digital payment platform PayMe is enjoying a surge in popularity during the coronavirus pandemic, hitting a new milestone since its introduction in 2017, as consumers go online to pay for everything from face masks to virtual social games.Its users reached the 2 million landmark last week, the lender said, representing a 25 per cent jump from a year earlier. The increase, together with 10 other e-wallets in the city, helped underpin a three-fold surge in transactions through the faster payment system (FPS) maintained by the Hong Kong Monetary Authority (HKMA)."We have seen above-average growth in registration and more active usage of PayMe over these few months of Covid-19 pandemic," Kerry Wong Chu Po-yin, managing director and head of PayMe, said in an interview. "The increase is seen in settling of bills, including those related to online social games such as mahjong and poker."The breakthrough is a consolation of sorts for the city's dominant lender in a year of mixed blessings. While commendable in supporting the city's stricken businesses and consumers with loan relief, the bank also provoked ire among investors for scrapping stock dividend to conserve cash and ride out the current health crisis.Kerry Wong Chu Po-yin, managing director and head of HSBC's PayMe unit, seen during an interview with SCMP on May 21. Photo: Jonathan Wong alt=Kerry Wong Chu Po-yin, managing director and head of HSBC's PayMe unit, seen during an interview with SCMP on May 21. Photo: Jonathan WongThe pandemic has forced consumers to step up their purchases online as companies asked employees to work from home to help contain the outbreak. Before the Covid-19 struck in January, street protests had driven consumers to electronic platforms as bank branches became targets of attacks.PayMe achieved the first million users in July 2018, 17 months after its introduction. About 80 per cent of its users have been active during the past few months, HSBC's Wong said. For example, some merchants recorded 15,000 to 40,000 transactions involving surgical masks alone in a single day, she added.Global digital payments revenues have nearly doubled in the last 10 years to almost US$2 trillion (HK$15.5 trillion) in 2018, according to a January report published by Deutsche Bank. The Asia-Pacific region, due to its market size and mass adoption of new technologies, accounted for nearly half of them.Since 2016, the HKMA has issued 18 licences for stored-value facilities e-wallet, and prepaid card operators, including PayMe, embracing financial technology in payment systems to complement cash and plastic cards.The de facto central bank also unveiled the FPS in September 2018 to improve retail payment services. The number of Hong Kong dollar and yuan-based transactions from 25 banks and 11 e-wallet operators hit a record 8.9 million in March this year.These e-wallets generated HK$53 billion of transactions in the fourth quarter of last year, a 10 per cent increase from a year earlier. About 44 per cent of them were payments for transport and in-store purchases, and 41 per cent for online transactions.Based on the value of peer-to-peer transactions, PayMe is Hong Kong's largest e-wallet operator. It accounted for 70 per cent of the HK$7.92 billion of fund transfers that flowed through all e-wallets in the fourth quarter of 2019.PayMe only expanded into business payment services a year ago and counts HKTVMall, Shopline and Boutir among its adopters, Wong said. That is a lot to catch up with the ubiquitous Octopus, whose 32 million cards in circulation ring up HK$180 million of transactions per day."Our payment platform also helps start-ups and other businesses to accept payment easily," she said. "Looking ahead, we will line up more big companies" such as utility providers, she added.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 © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

U.K. Banks Exposed to Hong Kong Fall Amid Political Turmoil

(Bloomberg) -- U.K.-listed banks with heavy exposure to Hong Kong slipped as China’s attempt to tighten its grip on the city fueled a political backlash.HSBC Holdings Plc dropped as much as 6.5%, the most in about seven weeks, while rival lender Standard Chartered Plc declined 4.7%. Insurer Prudential Plc tumbled 9.8%, its biggest fall in more than two months, before paring losses along with the banks.China confirmed on Friday that it would effectively bypass the city’s legislature to implement national security laws. The announcement triggered immediate calls for fresh protests and sent the MSCI Hong Kong index to its worst loss since 2008.“China’s latest move is damaging to gross domestic product, sentiment, loan growth and Hong Kong’s status as a global financial destination,” Bloomberg Intelligence analyst Jonathan Tyce said in written comments. HSBC and Standard Chartered each derive a quarter of their revenue from Hong Kong, and “far more” of their pretax profits, he added.Banks operating in Hong Kong, as well as luxury-goods makers, have been volatile since the final quarter of 2019 as protests gripped the city, sending it into recession. The global spread of Covid-19 spurred share plunges in 2020.Prudential, which has seen its shares plunge 28% year-to-date, is also highly exposed to the former British colony. Hong Kong accounted for 23% of the London-based company’s adjusted operating profit in Asia in 2019, more than any other market in the continent, according to the group’s annual report.And it wasn’t just European financials dropping on the Hong Kong developments, as luxury-goods makers that are dependent on sales in the city also slipped. Cartier watch-maker Compagnie Financiere Richemont SA and Gucci-owner Kering SA fell as much as 4.1% and 2.3% in Zurich and Paris, respectively.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Are These Two Unloved Tech Stocks Ready to Rebound?

SINA and Weibo are often considered also-rans in China’s crowded tech sector -- but could both stocks rebound as the macro headwinds wane?