Asian business spin-off ‘results in loss of value for HSBC shareholders’: HSBC
HSBC has told shareholders to vote against a spin-off of its Asian business, proposed by its largest investor Ping An Asset Management.
In a letter released on Wednesday, the bank presented four reasons behind its statement.
First, the divestiture “is not consistent with HSBC’s business model,” which is a mergers and acquisitions bank. Second, there will be “significant economic dis-synergies,” such as poor customer service.
Next, the bank’s divestment will have “one-time and ongoing costs,” such as tax leakage and the need for capital gains. Finally, the separation involves “implementation problems,” creating a “multi-year period of uncertainty.”
Ping An is pushing HSBC to divest its Asian business to boost the bank’s returns. “HSBC Group has infused HSBC Asia with equity and growth capital to support its Asia-based non-returnable businesses,” Ping An said in a statement on Tuesday.
— Yeo Boon Ping
Japan’s trade deficit rose to 21.7 trillion yen for the full year ending March 2023
Japan’s trade deficit reached a record high of 21.7 trillion yen ($161.14 billion) for the twelve months ending in March, up from 5.59 trillion yen recorded in the same period a month ago.
Exports from April 2022 to March saw an increase of 15.5% year-on-year to 99.2 trillion yen, while imports increased to 120.95 trillion yen.
For March alone, Japan’s exports rose 4.3% year-on-year, lower than the 6.5% recorded in February, while imports rose 7.3% in the same period, lower than February’s 8.3% gain.
Japan’s trade deficit narrowed in March to 754.5 billion yen, from a deficit of 897 billion yen in February.
— Lim Hui Jie
New Zealand first quarter lower than expected at 6.7%
New Zealand’s inflation rate for the first quarter slowed to 6.7% on an annual basis, lower than economists’ expectations of 7.1% and the first quarter’s figure of 7.2%.
The country’s statistics office reported that food prices were the biggest factor in the increase in the first quarter, increasing by 11.3% compared to the same period last year.
Earlier this month, the Reserve Bank of New Zealand raised rates by 50 basis points in a surprise move, taking its benchmark rate to 5.25%.
— Lim Hui Jie
Meanwhile, the first quarter’s earnings are more than market fears
The earnings season started on a positive note, with 10% of the overall index reporting better-than-expected earnings. Of the 53 companies in the S&P 500 currently reporting, 83% beat Wall Street expectations by 6%. Both of those salaries are above average.
The broad index has seen a modest uptrend in recent weeks, gaining 7% since reaching the bottom of the financial crisis in mid-March.
Fed’s ‘Beige Book’ notes stress from banking crisis
The financial crisis in March disrupted financial activity, especially in the New York and San Francisco areas, according to the Federal Reserve’s economic analysis released on Wednesday.
Since the last release, on January 18, the Fed’s “Beige Book,” the bank and in some cases the stock market appears to have pulled back from work. in the archives.
“The number of loans and loan requests among all types of consumers and businesses has declined” in the country, the report found.
In San Francisco, “Residential and commercial activity have fallen, and rental activity has declined sharply,” while “Renting activity has decreased sharply. debt restrictions and reduced philanthropic giving.”
In New York, “The conditions of the general financial sector have decreased significantly as the new stress on the banking industry.”
The Fed’s lending facilities helped cushion some of the damage from the SVB failure and the bank’s stress.
Another report found that overall business performance has changed little since last year.
The technical infrastructure is failing
Technology stocks showed signs of early weakness on Wednesday, with the S&P 500 information technology and communications services stocks down 0.8% and 1.1%, respectively.
Netflix led to some of the sector’s losses, more than 4% when the streaming giant issued mixed results and released plans to reduce password sharing. The streaming giant is the biggest draw in communication services, followed by Fox a Walt Disneyfalling by more than 2% each.
Microsoft a Alphabet every 1% is down, though Meta Programs moved 1.7% lower. Teslawhich was set to report gains after the bell, lost 2.7%.
Amazon It’s the only big tech player in the green, up about 0.6% amid news of job cuts in its advertising sector.
— Samantha Subin
Morgan Stanley shares fell despite better-than-expected results
Morgan Stanley reported earnings of $1.70 for the first quarter, topping the $1.62 estimate from analysts polled by Refinitiv. Revenue came in at $14.52 billion, above the $13.92 billion consensus estimate from Refinitiv as the stock market outperformed expectations.
A growth factor is the economy, where the income increased by 11% from last year.
Shares, which have outperformed most other stocks this year, were down 2% in early trading despite the positive results.
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Morgan Stanley shares, 1 day
“The investments we’ve made in our real estate business continue to add a solid $110 billion in new assets this quarter,” President and CEO James Gorman said in the release. make up. “Equity and fixed income earnings have been strong, while investment banking activity has continued.”