Ex-Peregrine high-flyer lands at HSBC
The merry-go-round in corporate communications among the big banks in Hong Kong continues with what we feel is an interesting development at HSBC. Some months ago, HSBC's Asia head of corporate communications Cindy Tang departed.
We gather that her position is shortly to be filled by Tom Grimmer. Until recently, he was managing partner, China, with Kreab & Gavin Anderson, and prior to that spent about 11 years as head of corporate communications and a consultant with Credit Suisse.
Older journalists recall him as the last man standing at Peregrine Investments, that mercurial house run by Philip Tose and Francis Leung that blew up spectacularly in 1998. As the bankers departed out of the back door, Grimmer addressed the press assembled at the front of the office and delivered the sad message that the firm was bust.
He and his wife Li Hui are something of a power couple. She was a well-regarded head of China research with stockbrokers CLSA for a number of years before leaving to pursue other projects in Beijing. For Grimmer, it's a kind of homecoming.
We're sure that he won't mind us saying that he spent a brief period with our own illustrious organ.
Storms ahead for Hong Kong Airlines
We see that our friends at Hong Kong Airlines are still encountering a spot of turbulence in some of their operations.
Readers will recall that we have reported a number of occurrences that might be considered unusual for an aspiring airline.
Last month, we noted that Hong Kong Aircraft Engineering Co (Haeco) had given the airline another month to complete payment of a US$20 million maintenance bill before turning the matter over to its lawyers. In addition, cabin staff members have been asked to clean the planes in place of an aircraft cleaning company. The airline has also suffered delays on account of not always having access to tugs to pull the aircraft back from the terminal building.
This, we gather, will no longer be a problem as the Airport Authority Hong Kong has tired of waiting for HKA to settle its bills, which are now believed to be in the region of HK$70 million. The airline has been stopped from using the terminal bridges and is now having to park at remote stands and bus passengers to and from the terminal building. The curious thing is that Hainan Airlines, which is also part of the group, doesn't seem to have these problems.
No sex, please - we're from HSBC
HSBC has hogged the limelight recently with revelations of its lax oversight of the anti-money laundering operations. This, according to a US Senate investigation, had resulted in Mexican narcotic cartels laundering up to US$7 billion through its HSBC accounts while also serving as a conduit for unsavoury regimes such as Syria and Iran. HSBC had links with the Al Rajhi bank, which was also involved in terrorist financing.
We jokingly suggested to a person 'not a million miles' from the bank as Private Eye likes to say, that what with drugs and terrorism the big standout that HSBC hasn't been accused of is any sex-related impropriety.
Quick as a flash he replied: 'Oh we're much too boring for that.'
Paying the piper
Soaring interest costs are a headache for euro-zone economies like Spain, and it must be doubly irritating to see money flowing just where it's least needed - and at negative interest rates.
For the first time, Germany sold Euro4.17 billion (HK$39.6 billion) of its 0 per cent two-year Schatz notes in a top-up auction yesterday at a negative yield of 0.06 per cent. Compare that with poor old Spain, which has struggled as its 10-year benchmark regularly climbs past 7 per cent, widely seen as unsustainable.
'It tells us there's no optimism whatsoever,' Marc Ostwald, a fixed-income strategist at Monument Securities, told Bloomberg. 'No one sees any resolution to anything in Europe.' He said people would rather park money with the German government, and pay for the honour of doing it, 'because they don't trust the banking sector and they don't trust the periphery'.
'If the euro breaks, then you want to be in the assets of the country which is going to have a strong currency, as opposed to the assets of the country which is going to have a weak currency,' he added.
A negative yield means investors who hold the notes to maturity will receive less than they paid to buy them. They would lose Euro750 per Euro1 million face value if held until maturity, according to Bloomberg closing prices. That makes the deposit rate of banks in Hong Kong look positively generous.