Day: May 5, 2023

HSBC has fought off an attempt by its biggest shareholder to break up the bank during a frequently tense annual general meeting.

Chinese insurer Ping An has been trying for more than a year to split the bank.

On Friday it failed to gain the backing of any other major shareholder as investors voted to reject the proposal.

HSBC chairman Mark Tucker said the result "draws a line" under a long-running debate about the bank's structure.

Despite being headquartered in London, the large majority of HSBC's profits are made in Asia.

Ping An, which holds an 8% stake in HSBC, wants the lender to separate out its Asian business.

It argues that the bank's profitable Asia operations are subsidising other parts of the bank that are not performing as strongly. Splitting HSBC would also set it free from the requirements of UK regulators.

Ping An and Ken Lui, an individual Hong Kong-based shareholder in HSBC, needed to secure 75% of all votes cast at the AGM to force through the split.

They failed to get those numbers, with no other major institutional investor backing the plan.

Mr Tucker told the AGM a break-up of the bank would undermine its global strategy, and would be both risky and costly.

"It would not be in shareholders' interests to split the bank," he told the AGM in Birmingham, which was frequently interrupted by climate change activists who claim HSBC is not doing enough to reduce its financing of polluting industries and businesses.

At the meeting, Mr Lui vowed to fight on with the break-up plan, saying he would keep pressure on HSBC's management and would lobby the bank's many small shareholders in Hong Kong.

It is not clear what Ping An's next step will be but there are bigger factors at play beyond making a return on its investment.

Ping An is partly owned by the Chinese state and, according to some analysts, could be representing Beijing's political aims as much as its shareholders' financial interests.

Hong Kong is by far China's most important financial hub and HSBC is the centrepiece institution.

Some argue that to Beijing, the idea of simply leaving the city's most valuable asset in Western hands could be a risk that is too big to take.

The example of Russia's economic isolation following the invasion of Ukraine is a case in point.

Should a similar geopolitical crisis emerge involving China - not an impossibility given the tensions around Taiwan and the South China Sea - having a grip on one of Asia's top banks will be vital.

In this sense, HSBC is dealing with an existential crisis that dates back to its founding in Hong Kong under British rule.

For most of its 158-year history, the Hong Kong and Shanghai Banking Corporation - as it was originally known - has had a long-distance relationship with the UK.

In fact, HSBC only became a major UK High Street player in the 1990s, when it bought Midland Bank and moved its headquarters to London in 1993. To this day, HSBC even prints the bank notes in Hong Kong.

"There is a jarring gap between HSBC's centre of gravity in Hong Kong and its subservience to regulators in Britain," says Steve Vickers, a corporate risk consultant based in Hong Kong. "This is an accident of history and a remnant of the colonial era."

A small taste of this came in 2020, when the Bank of England directed HSBC and other British lenders to stop paying out dividends to shareholders because of the pandemic.

This enraged ordinary shareholders in Hong Kong, who own about a third of HSBC's shares and many of whom rely on the payments for their retirement funds.

From the Chinese mainland perspective, it was a simple but stark illustration of the power of officials on the other side of the world. Asia may generate the money, but ultimately London calls the shots.

This is not a situation either Ping An or China wants to be in. It may explain why Ping An is pushing HSBC so hard and so publicly with the kind of shareholder activism that is normally associated with Western investors.

"A more assertive China is now unafraid to project itself in the international business arena," says Steve Vickers. "But they have to tread very carefully with HSBC - the stakes are high."

Source: BBC

A group of 19 business leaders and entrepreneurs from Pakistan have attended ‘Select USA Investment Summit’ held in Washington D.C.

The largest ever Pakistani delegation attending this year’s summit represented a range of businesses including clean energy, telecommunications, IT, security, chemicals, packages, fabrics, constructions, agriculture, manufacturing, food & restaurants, pigments, logistics, education, rubber industry, automobiles and others.

Pakistan’s Ambassador to the United States Masood Khan hosted Pakistani delegation and Select USA leadership including Executive Director for Asia at the US Department of Commerce Ms. Aileen Crowe Nandi, SCO Foreign Commercial Services Mr. Nathan Seifert.

The Ambassador appreciated the contributions of Pak-American community who were investing in Pakistan and were playing a critical role towards building bridges and connecting the people of the two countries.

He said United States is the largest trade partner and export destination for Pakistani products and 80 US enterprises are undertaking profitable business venture in Pakistan, employing 150,000 persons and providing livelihood to nearly one million household.

He expressed hope that Pak entrepreneurs attending the Select USA Summit would also take an initiative to launch ‘Select Pakistan’ for enhanced investments in the country.

Masood Khan said that Pakistan is emerging as a huge regional business ecosystem acting as a hub for Central & West Asia, Turkey, Middle East and North Africa and therefore should be an attractive destination for investment and business activities. He said the government is investing in women’s entrepreneurship to make Pakistan’s economy and businesses inclusive.

Speaking on the occasion, Ms. Aileen Crowe Nandi said the US administration is committed to provide a conducive environment to business community. Acknowledging huge potential of Pakistani female entrepreneurs, she expressed the hope Pak businesswomen and entrepreneurs would also visit the United States to explore business opportunities and expand their networks.

The Select USA Summit is the highest profile event in the United States aimed at providing business leaders, from across the globe, a unique opportunity to explore investment opportunities, expand their businesses and forge robust networks.

This year the event was attended by over four thousand delegates from different parts of the world.

Source: Radio Pakistan

The Economic Coordination Committee (ECC) of the federal cabinet has approved a request of the Ministry of National Food Security and Research (NFSandR) for the procurement of 1.80 million metric tons (MMT) wheat by Pakistan Agricultural Storage and Services Corporation (PASSCO) with a cash credit limit (CCL) of Rs. 201 billion at a rate of Rs. 3,900 per 40-kg.

The wheat procurement request was approved at the apex committee’s meeting presided over by Finance Minister Ishaq Dar, reported Business Recorder.

The Ministry of National Food Security and Research informed the ECC that PASSCO purchases wheat from Punjab, Sindh, and Balochistan and distributes it to deficit areas and agencies which helps maintain the country’s strategic reserves. Procurement occurs at the announced minimum support price (MSP) in accordance with federal cabinet targets.

The meeting was apprised that the estimated release from PASSCO’s stock is 638,848 MTs, rendering a carry-forward stock of 1,325,265 MTs at the start of the new food year.

The Food Ministry proposed the ECC to assign PASSCO a wheat procurement target of 1.80 MMTs with a tentative CCL of Rs. 201 billion at a procurement price mentioned above, a minimum level of carry-forward stocks, and the current pricing trend in the local wheat market.

The ECC instructed the MNFSandR to form a committee to examine proper wheat usage, and wheat storage mechanisms/silos in the country, and present its findings to the ECC within 15 days.

Source: Pro Pakistani

Foreign Minister Bilawal Bhutto Zardari held a meeting with his Tajik counterpart Sirodjiddin Mukhriddin on the sidelines of the SCO meeting in Goa.

The two foreign ministers discussed broad spectrum of bilateral relations and agreed to further strengthen economic ties and early completion of connectivity projects in particular CASA-1000.

Source: Radio Pakistan