Bears on rise in home market

Bears on rise in home market
Economic worries and rising mortgage rates expected to push Hong Kong property prices down for at least a year, ending two years of stunning rises
Peggy Sito and Paggie Leung
SCMP Nov 09, 2011

Bulls are quitting the city’s housing market as the betting from analysts swings towards the view that home prices have entered a falling cycle that will last for at least the next 12 months.

Though opinions differ on whether the city has already tipped from a bull to a bear cycle, there is widespread agreement that prices could fall between 5 per cent and 20 per cent because of the rising cost of home loans and the economic concerns locally and abroad.

In the unlikely event that the Hong Kong economy suffers a hard landing, home prices could collapse by as much as 45 per cent, according to Barclays Capital Research.

“Clearly, the market is going through a period of soul-searching and undergoing a reality check, with many now sitting out the global turmoil and those that are buying dictating the level of pricing rather than the vendor,” said Nicholas Brooke, chairman of consultancy Professional Property Services.
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HSBC lays off HK investment bankers

HSBC lays off HK investment bankers
Reuters in London
Nov 11, 2011

HSBC Holdings is laying off several hundred investment bankers in Hong Kong, London and elsewhere this week as part of its jobs cull to save billions of dollars, people familiar with the matter said.

Staff in the global banking and markets (GBM) investment bank arm were being told of the cuts this week, and some had already been told, several sources said. It is expected to affect several hundred of GBM’s 20,000 staff.

Europe’s biggest bank plans to axe 30,000 jobs by the end of 2013 under a revamp by Chief Executive Stuart Gulliver to cut annual costs by US$3.5 billion. It has shed 5,000 to date, it said on Wednesday.

The bank had 296,000 staff at the end of last year, so the cuts represent 10 per cent of the workforce. That would equate to about 2,000 staff at GBM, although that could be more as investment banking revenue has been hit hard by recent euro zone turmoil, especially in credit and rates. The bank has also said it will hire in some growth areas and countries.

HSBC has pinpointed five countries and its UK headquarters for the first wave to face cuts, mostly by the end of the year. It has said 3,000 jobs would go in Hong Kong, but not detailed any more specific cuts. The other affected countries are the United States, Brazil, Canada and Mexico.

“We are not commenting on specifics but HSBC is going through an efficiency programme as described at the investor day in May. The programme is about reducing bureacracy and enhancing organisational effectiveness,” a spokesman for the bank said.

Gulliver has said the cost base is “unacceptable” and wants to get expenses below 52 per cent of income. He has some way to go – costs represented 59.1 per cent of underlying income in the first nine months of this year, up from 54.4 per cent a year ago.