The looming 18th National People's Congress of the Communist Party of China is, as we have already seen, a delicate time for the leadership. But we understand the tension has not been confined to the upper levels of the party. Children and those taking taxis have also been affected by measures that we find somewhat bemusing, given the mainland's status as the world's second-largest economy.
According to the official Beijing Youth Daily, Beijing stores are insisting that people who want to buy toy radio-controlled helicopters show their identity cards and give their names and addresses. No explanation has been given for these arrangements, which will last for the duration of the congress. The speculation is that these measures are to minimise the possibility of people sending these toys to hover over sensitive locations trailing posters with subversive messages.
Also, taxis have been told to keep their windows closed when driving past sensitive areas in Beijing. This is to reduce the possibility of people throwing leaflets around containing politically incorrect messages. We are told that some Beijing stores have posted notices saying they will not be selling knives during the congress.
In addition, there have been reports that some internet connections are down, while some internet service providers have said they are planning to close down for a few weeks for maintenance. This has led to speculation that a more widespread shutdown of major websites and ISPs is being contemplated. Not for nothing is the June 4 anniversary of the Tiananmen Square crackdown jokingly referred to among netizens as internet maintenance day.
Messages referring to the 18th party congress are already being blocked, as is the slang term for it - shi ba da, meaning Big 18. The pronunciation is not unlike "Sparta", the name of the city state in ancient Greece. For this reason, there has been an increasing frequency of the word "Sparta" in weibo messages as netizens seek to avoid being blocked.
U've Been Sacked
UBS has laid off 50 to 60 traders in Hong Kong, Singapore and Tokyo over the past few days as part of its planned 10,000 global job cuts, MarketWatch reports. The majority of job losses have occurred in fixed income, currencies and commodities.
The bank was brought to its knees in 2008 with losses of US$50 billion in its fixed-income business. The downsizing is all part of UBS' efforts to reorganise its investment bank and boost profitability by cutting its less profitable businesses and reducing risk-weighted assets by US$107 billion by the end of 2017. Although most of the job losses will be occurring in London and Switzerland, the joke circulating locally recently is that UBS stand for "U've Been Sacked". There were others of a more vulgar nature that we are unable to print.
ICICI at Level 1
India's second-largest financial institution by assets, ICICI Bank, opened its second branch in Hong Kong yesterday. The bank is on Level 1 of Chuang's Tower, Connaught Road Central. India's Big Four banks have a surprisingly low profile in Hong Kong. The largest, State Bank of India, also has two branches, one of which, in Cameron Road, Tsim Sha Tsui, is the only Indian bank at street level. ICICI's new branch is the next closest, on Level 1. Other Indian banks, even those offering retail services, reside at loftier levels of Hong Kong's high-rise buildings.
The cost of saving face
Investors in Facebook's IPO weren't the only ones to take a hit in that ill-starred venture. Bloomberg reports that according to a blog post by economists Thomas Eisenbach and David Lucca, underwriters may have spent an estimated US$66 million supporting the price of Facebook shares on their first day of trading in an effort to prevent them falling below the US$38 issue price. The economists estimate the support effort probably lost underwriters 40 per cent of their commission on the US$16 billion offer.
"If this estimate is correct, underwriters' reputational concerns and obligations to the firm may have outweighed their short-run profit motive," they wrote.
The IPO was led by Morgan Stanley, along with JPMorgan and Goldman Sachs, with 30 other investment banks. The banks are believed to have shared commissions of US$176 million.
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