Reuters: Regulatory News: UPDATE 1-Piper Jaffray to exit Hong Kong market by September

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Piper Jaffray to exit Hong Kong market by September Jul 25th 2012, 14:29 Wed Jul 25, 2012 10:29am EDT July 25 (Reuters) - Piper Jaffray Companies said it would exit its money-losing operations in Hong Kong, the latest in a series of steps the investment bank has taken to cut costs, sending its stock up as much as 5 percent. The investment bank, which is over a 100 years old, was hit hard by the financial crisis and the capital markets freeze and has been shedding jobs to ride out the slowdown. Several investment banks are moving out of the region. Samsung Securities shut operations in the region outside Korea a few months ago. Royal Bank of Scotland is selling most of its Asian equities division to Malaysia's CIMB Group and Credit Agricole is in talks to offload its stake in CLSA. Piper Jaffray said it does not have the financial resources to build out its Hong Kong business to handle more than initial public offerings or to absorb the significant losses in that market. The unit generated a $4 million pre-tax operating loss in the second quarter. Piper Jaffray had until last year maintained that expanding in China was its key strategic priority and had bulked up in the region by buying Hong Kong-based investment bank Goldbond Capital Holdings Ltd in 2007. The company expects to exit the market by September, either through a sale of the business or a shut down. But analysts say a shut down is a more likely in the current environment. "At the moment, it will be hard to find a buyer. The bigger investment banks are more established and the smaller, more mid-tier banks are probably generating the exact same of losses," Morningstar analysts Michael Wong said. Piper Jaffray expects to realize cash proceeds of between $13 million and $18 million from the exit. Net income fell to $6.9 million, or 37 cents per share, for the second quarter, down from the $10.7 million, or 55 cents per share, a year earlier. Net revenue for the quarter fell almost 20 percent to $106.4 million, hurt by lower investment banking revenues, which fell by a fourth from year-earlier levels. Piper Jaffray's shares were up 4 percent at $20.34 on Wednesday morning on the New York Stock Exchange. They had risen as much as $21.51 earlier in the session. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions