HSBC remaining upbeat on region's long-term outlook

Though there are doubts about the near-term prospects for Asian economies, Hong Kong and Shanghai Banking Corp (HSBC, 香港上海匯豐銀行) remains upbeat on the region.

"HSBC plans to launch its Internet banking business in Taiwan in the third quarter," said David Eldon, who's in charge of the bank's Greater China division. "It shows that HSBC remains confident in Asian economies, including Taiwan."

The bank's proposed Internet operation is just HSBC's latest step to offer a wider variety of banking services in Taiwan.

Last month, HSBC said it had bought a controlling stake in China Securities Investment Trust Corp (中華投信), Taiwan's largest fund manager. The bank put up US$103 million in cash to acquire a 53 percent stake owned by China Development Industrial Bank (中華開發工銀).

In the near term however, the bank, like others keeping close tabs on the regional and world economy, is skeptical that a pick-up could take place before the end of the year.

"We're skeptical as to whether the global economy can be revived by the end of this year," Eldon said. "Last October, HSBC noticed that the global economy was heading toward a downturn, based on the decline in shipping volume from Asia to the US. We're not sure whether the US economy will have a V-shaped or U-shaped recovery during the current cycle."

As for New Taiwan dollar -- which many believe the central bank wants to weaken further in order to boost exports -- Eldon warned that too steep of a drop may lead to a competitive devaluation across the region.