Bond market to widen
Beijing is likely to allow foreign companies to issue yuan-denominated bonds on domestic markets this year, state media said yesterday, citing People's Bank of China Vice Governor Wu Xiaoling (吳曉靈). Wu said the central bank was in favor of foreign companies and international organizations issuing yuan-denominated bonds in China, the China Securities Journal reported. Foreign firms currently must transfer foreign exchange from abroad when they need capital for domestic investment purposes. The World Bank's International Finance Corp and the Asian Development Bank are the only foreign entities allowed to issue yuan-denominated bonds in China at present.
French union warns Airbus
A French trade union representing Airbus workers threatened to disrupt production at the aircraft manufacturer if the company refuses to renegotiate a new restructuring plan. Julien Talavan, general secretary of the Force Ouvriere (FO) trade union at Airbus, said in an interview published yesterday in the daily La Tribune his union was prepared to "block the production of airplanes" if a new discussion with Airbus executives did not lead to a re-distribution of production between French and German Airbus factories. He said that the decision taken as part of the Power8 program to have a final assembly line of the A320 aircraft transferred to Hamburg, Germany, was "unacceptable." He also said his union opposed the spinning off or sale of the French Airbus sites at Meaulte and Saint Nazaire.
HSBC's annual profit up 5%
British banking giant HSBC Holdings, Europe's largest bank by market value, reported yesterday that profit rose 5 percent last year despite losses in its mortgage operation in the US. HSBC, which operates in the UK, Europe, Asia and the Americas, reported net income of US$15.79 billion, up from US$15.08 billion in 2005. Total operating income rose 14 percent to US$70 million, the company said. "It is a testament to HSBC's strength and diversity that we grew pretax profits in 2006 to US$22 billion, despite a major setback in part of our mortgage business in the United States," group chairman Stephen Green said.
HSBC inks Indian deal
HSBC Holdings yesterday tied up with Bangalore-based Canara Bank and another Indian lender to set up an insurance business, entering a market that is expanding as incomes grow and life expectancy rises. State-owned Canara Bank will hold a 51 percent stake in the venture, initially capitalized at 2 billion rupees (US$45.3 million), with HSBC taking 26 percent and New Delhi-based Oriental Bank of Commerce the rest, a Canara official said. An initial agreement was signed by the three partners in New Delhi yesterday.
BA Connect routes canceled
British Airways yesterday canceled some loss-making routes served by its regional subsidiary BA Connect as it sold the business to Flybe for an undisclosed sum. BA said many of the canceled services duplicated Flybe's routes. With the acquisition, Flybe will have 152 routes to 36 European destinations, BA said. BA will absorb an additional £20 million (US$38.9 million) charge in consequence of the sale, on top of a £106 million charge disclosed when the deal was announced last November.