Lai See

PUBLISHED : Thursday, 23 July, 2009, 12:00am
UPDATED : Thursday, 23 July, 2009, 12:00am


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Interim report card looms for banking's big elephant

HSBC Holdings was criticised four months ago for not issuing a profit warning before its annual results. Now the bank could come in for some more flak over its imminent interim results.

The bank has enjoyed a strong share run since its mega rights issue in March but ironically that comeback could see it report a paper loss for the half year when it announces the results on August 3.

This is because the rights issue price of HK$28 a share is low compared to its interim closing price of HK$65.65.

The difference, according to International Financial Reporting Standards, is a liability to be charged to the bank's balance sheet account.

According to a Goldman Sachs report this week, analyst Roy Ramos estimated HSBC needed to take an exceptional charge of US$4.7 billion, compared to a US$5.4 billion profit he expected for the bank this year.

Could this mean the bank will end up in the red?

Because the charge is a non-cash item, the bank is unlikely to feel it necessary to give the shareholders a heads up before the announcement and, as was pointed out last time, it is under no obligation to do so.

What will the hundreds of thousands of retail investors think about their beloved big elephant turning in another poor report card? We shall find out in 10 days.

Reading matters

It's that time of the year when teenagers queue up overnight to buy their favourite books - usually in the shape of photo albums of teen models. Yes, it's the Book Fair.

Pre-teens, however, are being encouraged to be more serious about their reading matter. For the second year, Sun Hung Kai Properties' Book Club is handing out 1,100 vouchers worth HK$200 each for underprivileged students aged between nine and 12 to spend at the fair.

Pandering to audiences

Ocean Park chairman Allan Zeman (below), who never misses an opportunity for publicity, will be at the fair over the weekend to support two authors who have written books about pandas.

Judy Chen Qing, the head of the Ocean Park Conservation Foundation, will be promoting her book, Qing and Qing. The other book is Kiss Kiss Red Panda by local journalist Chris Wat.

The question is: will Mr Zeman be turning up in a panda outfit?

Talking point

One author who will not be at the fair is Malcolm Gladwell. However, the New York-based journalist and pop sociologist who wrote the bestsellers, The Tipping Point, Blink and Outliers, will be in town for the first time on August 7, to give a talk at the Four Seasons Hotel. The going rate for a seat is HK$5,200, which could buy you 10 sets of his three books at Dymocks.

Schools ignore recession

The word 'recession' doesn't seem to appear in the dictionary of our private schools.

A review by the media shows that 22 of them will increase fees by between 3 and 12 per cent for the coming school year.

Leading the pack is the ISF Academy, which will raise its fees by 12 per cent to HK$133,300 for students in primary six to form four, and 9 per cent to HK$114,500 for students in primary one to five.

The new annual charges are in the ballpark of some of the MBA programmes being offered by London and some local universities.

Next in line were international schools such as Australian International School Hong Kong (HK$92,000), Lycee Francais International (HK$75,330) and Sear Rogers International School (HK$56,100), which raised their fees by about 6 per cent.

The Diocesan Girls' School raised its fees 3 per cent to about HK$39,000 a year, the third consecutive annual increase. The Chinese International School is also only raising its fees 3 per cent, but it charges HK$147,600 a year.

It can't be long before some of these schools start applying for an initial public offering because we feel sure many parents would like to own a piece of them.

Canning the rumours

Shares of Hutchison Telecommunications International hit a record high yesterday on hopes that parent Hutchison Whampoa is close to selling its mobile business in Israel, Partner Communications.

Israeli newspapers reported this week that group managing director Canning Fok Kin-ning was in the country to meet potential bidders. However, according to others, Mr Fok was in Hong Kong the whole time.