HK economy and HSBC Yau Tat Kwan, Jacob

Analysis of current economy of Hong Kong  Overview of Hong Kong’s real GPA  2008  4 th quarter: -2.6%  2009  1 st quarter: -7.8%  2 nd quarter: -3.6%  3 rd quarter: -2.4%

internal growth  private consumption expenditure edged up 0.2% in Q3, contributing 0.1 percentage points to GDP growth.  Gross fixed capital formation did even better by rising 1.3%, contributing 0.3 percentage points to GDP.  Government consumption expenditure also rising at the fastest pace of 3.3% since the recession began and contributing another  0.3 percentage points to GDP growth,  all three internal growth drivers combined contributed 0.7 percentage points

HSBC  Stock number: 0005  The Hong Kong and Shanghai Banking Corporation Limited (HSBC)

HSBC  One of the largest banking and financial services organizations in the world.  An international network of some 10,000 properties in 86 countries and territories in Europe; Hong Kong; Rest of Asia-Pacific, including the Middle East and Africa; North America and Latin America.  A comprehensive range of financial services is offered to personal, commercial, corporate, institutional, investment and private banking clients.

Profits in 2008  Europe: US$10.9 billion, up 26 per cent.  Asia: US$11.9 billion, 11 per cent down  (Hong Kong): US$5.5 billion, down 26 percent  Latin America: US$ 2 billion, down 6 percent

HSBC HOLDINGS - 10 Years (Monthly)

Earnings Summary

In the long run  Chinese economy has maintained decent growth via domestic growth impetus, providing solid support to the Hong Kong economy.  Q1: 6.1%  Q2: 7.9%  Q3: 8.9%

Coming into the China Market  After the opening of a subsidiary bank in Fo Shan, the next step is to set up further banks in Zhong Shan and Wei Zhou.  The strategy is to occupy most important cities in the Pearl River Delta.  Taking the advantage of this, HSBC would like to become the first listed foreign company in China.

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