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SCMP Reporter

Three units of Lehman Brothers Holdings suspended operations in Hong Kong yesterday following the investment bank's bankruptcy  in the United States.
Lehman Brothers Asia, Lehman Brothers Securities Asia and Lehman Brothers Futures Asia all ceased operations, the  US bank said in a statement. However, Lehman Brothers Asset Management Asia continues to operate.
The 158-year-old bank filed for bankruptcy on Monday after bailout talks with possible suitors broke down over price.
The Securities and Futures Commission approved restrictions on the four units yesterday.
Lehman Brothers Asia is unable to deal with clients and its futures unit is able to close out trades only today. Lehman Securities can deliver securities, for cash only, in the last two days of the contract.
The asset management arm could continue business but was unable to pay out of its own funds, the statement said.
The SFC said  it was taking the measures to 'preserve the assets of the companies and their clients and to protect the interest of these clients and the investing public'.
Meanwhile, the Hong Kong stock exchange said  it had suspended Lehman's access to the options market until further notice.
The bank had at least US$155 billion in bonds outstanding that were now trading at 30 cents on the US dollar, brokers said.
US-based research firm CreditSights expected the bonds to settle at between 60 cents and 80 cents on the US dollar.
US investment bank Citi acted as the trustee for US$138 billion of the debt and will act on behalf of bondholders trying to get their money back. Outstanding Hong Kong dollar bonds total only HK$595 million, according to data from Dealogic.
'There's been quite an active market on the US dollar paper with the guys that actually believe they may get 60 cents,' said one  trader.
Lehman also has about 135 outstanding warrants in Hong Kong that mature between now and April  next year.
Despite the restrictions on the bank's businesses, 800 Hong Kong employees  went to work yesterday. No lay-offs have been announced on the bank's  3,000  employees in the Asia-Pacific region.
'Everyone is still waiting for guidance on exactly what's going on,' said one employee. 'People are wondering if they are going to get paid. Payday is the 25th and whether it will be a full month or half month that is a critical question.'
The bankruptcy also leaves corporate clients such as Li & Fung, Citic Group, CNOOC and China Unicom in the lurch as  the companies were advised by Lehman on acquisitions that had not yet closed. Rival banks were expected to pick up such mandates.
Financial regulators in two other major Asian markets, South Korea and Japan, have also taken action against the collapse of Lehman.
Korea's Financial Services Commission was implementing similar measures, while Japan's Financial Services Agency halted some of the firm's operations on Monday.
Lehman's Japanese unit filed for bankruptcy yesterday. It is Japan's second-largest bankruptcy.
Value crunch
Amount Lehman has in bonds trading at 30 cents on the US dollar, in US$: $155b



Three Lehman firms suspend HK operations