HSBC pulling out of Japan
HSBC Holdings PLC, Europe’s largest bank, will withdraw from consumer banking in Japan, closing down six branches four years after starting the business. HSBC will stop selling new investment products, including mutual funds, from March 8, and it will end operations in its branches in Tokyo, Osaka and Nagoya by July 31, the London-based bank said in a memo e-mailed to its customers yesterday. A spokesman in London confirmed the details of the e-mail. The UK lender is scaling back in parts of Asia, including Japan, South Korea and Thailand, as CEO Stuart Gulliver cuts costs and prepares for tighter capital rules. HSBC last month agreed to sell operations in Costa Rica, El Salvador and Honduras to Colombia’s Banco Davivienda SA for US$801 million to focus on bigger markets in Latin America.
Poll shows recession risk
Eurozone private sector activity fell back this month after returning to growth last month, a key survey showed on Wednesday, stoking concerns the region was flirting with recession. The composite purchasing managers’ index for services and industry compiled by the research firm Markit fell to 49.7 points this month, from 50.4 points last month, but was still up from 48.3 points in December. Any score in the survey of 4,500 manufacturing and services firms above 50 points indicates growth, while a score below indicates contraction. In the services sector alone, last month’s index reading slid to 49.4 points from 50.4 points, while in manufacturing there was a slight improvement, to 49 points from 48.8 points. Markit chief economist Chris Williamson said the outcome was disappointing and highlighted the continued risk that the eurozone could fall back into recession.
US home sales increase
Sales of existing homes rose last month to the highest pace in nearly two years, flashing modest signs of health ahead of the spring-buying season. The National Association of Realtors said on Wednesday that US sales rose 4.3 percent last month to a seasonally adjusted annual rate of 4.57 million — the highest level since May 2010. Home sales have risen in three of the past four months, but they remain well below the 6 million that economists equate with a healthy market. The report offered a mixed picture of the slowly improving housing market. The number of first-time buyers, who are critical to a housing recovery, increased slightly to make up 33 percent of all sales. That is still below 40 percent, which tends to signal a healthy market. Sales of homes at risk of foreclosure also increased to 35 percent of all purchases. Those sales hurt the market by lowering broader home prices.
GDP growth may hit 8%
India’s economic growth could accelerate by as much 8 percent in the next fiscal year despite a difficult global climate, a top government panel said on Wednesday. Asia’s third-largest economy has lost momentum since the central bank raised interest rates 13 times since March 2010 to reduce inflation from near double-digits to its current 26-month low of 6.55 percent. C. Rangarajan, head of Prime Minister Manmohan Singh’s Economic Advisory Council, forecast the range for GDP growth in the next fiscal year at between 7.5 percent and 8 percent. Rangarajan forecast growth of 7.1 percent growth for the current fiscal year that ends on March 31, the slowest rate in three years and far below the panel’s bullish initial forecast of a 9 percent expansion.