The Star Online: Business
The Star Online: Business |
- HSBC to sell 195 NY bank branches for US$1bil
- US Congress closing in on a deal to avert US default
- Dim outlook for LED market
| HSBC to sell 195 NY bank branches for US$1bil Posted: 31 Jul 2011 05:01 PM PDT NEW YORK (AP) - HSBC said Sunday it will sell 195 retail bank branches, most located in upstate New York, to First Niagara Bank in a deal worth about $1 billion. The sale is part of HSBC's strategy, presented to investors in May, to shift its focus away from retail banking to commercial and corporate banking, and to target investment in high-growth economies. HSBC, which is still dealing with the legacy of bad loans in the U.S. from the 2002 acquisition of consumer lender Household International Inc., said in May that it intended to trim its costs by up to $3.5 billion within three years. The companies expect the all-cash transaction to be completed early next year. First Niagara, a unit of First Niagara Financial Group Inc. of Buffalo, New York, said in a statement that it expects to retain most of the 1,900 workers currently employed by the affected banks. HSBC Bank USA, a subsidiary of British banking company HSBC Holdings PLC, operates more than 470 bank branches in the U.S., including about 370 in New York. It has total assets of $197 billion through its retail, commercial, global and private banking segments and its wealth management divisions. The 195 banks being sold represent about $15 billion in deposits, and HSBC will receive a premium of 6.67 percent of the deposits transferred when the deal closes, the company said in a statement. Based on May 31 figures, that would be about $1 billion. When the deal is completed, First Niagara expects to have $38 billion in assets, $30 billion in deposits and 450 branches in Pennsylvania, upstate New York and the northeastern New England states. The sale involves 183 branches in upstate New York, four in Westchester County, New York, two in Putnam County, New York, and six in southern Connecticut. The retail banks will remain open during the transition. HSBC will continue to provide commercial banking services in the region. Latest business news from AP-Wire Full Feed Generated by Get Full RSS, sponsored by Used Car Search. |
| US Congress closing in on a deal to avert US default Posted: 31 Jul 2011 04:59 PM PDT WASHINGTON (AP) - Top Democrats in both houses of Congress emerged from a Sunday afternoon crisis meeting, with the party's leader in the Senate saying he hoped the upper chamber would vote soon on a compromise deal that would raise the nation's borrowing limit and avert an unprecedented default on its debt. Senate Majority Leader Harry Reid told reporters who flocked around him as he left the office of Rep. Nancy Pelosi, the Democratic leader in the House, that he hoped there would be a vote on the plan Sunday night. But as time dragged on and House Speaker John Boehner, a Republican, scheduled a conference telephone call with his rank and file, the likelihood of any vote Sunday night appeared less likely. Reid later issued a statement saying he had signed off on a pending agreement, subject to approval by the Democratic rank and file in the Senate. There were indications the deal had found sufficient backing from Senate Democrats. But it still lacked support among the most liberal Democrats and conservative, tea party-backed Republicans in the House of Representatives. Pelosi said she would be meeting with House Democrats about the compromise measure on Monday. "We all may not be able to support it or none of us may be able to support it," Pelosi said, indicating Democrats would want to study the plan. Should it pass both houses, the compromise legislation stood to close out one of the nastiest partisan political fights to engulf the American government in recent memory. Democrat Reid and Senate Minority Leader Mitch McConnell, a Republican, spoke optimistically earlier in the day that an agreement was in reach, but Washington fell silent on a blisteringly hot summer afternoon as politicians continued to huddle for last minute talks on the plan. But by late Sunday officials said a final sticking point concerned possible cuts in the nation's defense budget in the next two years. Republicans wanted less. Democrats pressed for more in an attempt to shield domestic accounts from greater reductions. The White House, McConnell and Boehner remained silent. Reid had said he was "cautiously optimistic," while McConnell said that negotiators were "very close." But as the day wore on and legislators continued crisis sessions in the capitol, politicians on the extremes of both parties lambasted the deal and threatened to try to block an agreement even with the deadline for a U.S. default ticking down to midnight Tuesday. Without legislation in place by then, the Treasury will not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy. If approved, though, a compromise would presumably preserve America's sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew. The broadest outlines of the emerging plan, a deal being worked out in negotiations involving McConnell and Vice President Joe Biden, would raise the federal debt limit in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections. Big cuts in government spending would be phased in over a decade. Thousands of programs - the Park Service, Internal Revenue Service and Labor Department accounts among them - could be trimmed to levels last seen years ago. No benefit cuts were envisioned for the Social Security pension system or Medicare, the federal program that provides health care payments to the elderly. But other programs would be scoured for savings. Taxes would be unlikely to rise. Any agreement would have to be passed by the Democratic-controlled Senate and Republican-controlled House before going to the White House for Obama's signature. With precious little time remaining, both chambers were on standby throughout the day, and House Speaker John Boehner was in his office. The Senate began the day by rejecting an effort to advance a Democratic approach to resolving the debt issue. The vote was 50-49, or 10 short of the 60 votes needed to move forward on legislation proposed by Reid last week. That plan would have carried out $2.4 trillion in deficit reduction over 10 years while raising the debt ceiling by $2.2 trillion. The outcome of that vote was expected and did not directly affect the behind-the-scenes negotiations on a compromise. Undaunted, Reid said then that "We are hopeful and confident it can be done." Officials familiar with the negotiations said that McConnell had been in frequent contact with Biden, who has played an influential role across months of negotiations. The talks were proceeding toward a two-step system for raising the debt limit and cutting spending. The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade. That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year. If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed balanced-budget constitutional amendment. If that failed to pass, automatic spending cuts totaling $1.2 trillion would automatically take effect, and the debt limit would rise by an identical amount. Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare. Officials describing those steps spoke on condition of anonymity, citing both the sensitivity of the talks and the potential that details could change. The emerging deal could mark a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives. As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections. But barring a change, it appeared Obama's proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor would his call for extended unemployment benefits for victims of the recession. Republicans would win spending cuts of slightly more than the increase in the debt limit, as they have demanded. Additionally, tax increases would be off-limits unless recommended by the bipartisan committee that is expected to include six Republicans and six Democrats. The conservative campaign to force Congress to approve a balanced-budget amendment to the U.S. Constitution would be jettisoned. Congressional Democrats have long insisted that Medicare and Social Security benefits not be cut, a victory for them in the proposal under discussion. Yet they would have to absorb even deeper cuts in hundreds of federal programs than were included in Reid's bill, which many Democrats supported in a symbolic vote on the House floor on Saturday. - AP
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| Posted: 31 Jul 2011 04:52 PM PDT GEORGE TOWN: Manufacturing companies involved in the light-emitting diode (LED) business are experiencing a slowdown in the second half of the year due to an over-supply situation in the global market. Globetronics Technology Bhd chief executive officer Heng Huck Lee told StarBiz that the group's LED chip products was down by between 5% and 10% compared with the corresponding quarter last year. Globetronics LED business is one of the key contributors to the group's revenue annually. "For Globetronics, we have managed to find new customers for our integrated circuits used for hard disk drives, and high performance timing device used in consumer electronic products, which will help the sustain business in the second half. "We will introduce a new range of 10,000 lumens LED module product in November for customers in the United States and Europe, which will generate income in 2012," he added. Heng added that the debt crisis situation in the US and Europe and the over-supply situation in the LED market had made the second half a challenging business environment. "The stronger ringgit and the rising cost of power will increase production cost while eroding margins," he said. Pentamaster Corp Bhd executive chairman C.B. Chuah said orders for the group's LED testers dropped by about 30% to 40% in the third quarter. "Due to the excess supply of LEDs in the market, it is unlikely that business will pick up in the fourth quarter," Chuah said. The group's LED testers, which are used in determining the brightness, colours, and electricity characteristics of LEDs, contribute about 15% of the group's revenue annually. Chuah said the global economic crisis also contributed to the slower sales of LED products and LED testers. "LED lighting is five time more expensive than conventional lighting. Thus, in times of economic crisis, the LED replacement rate will be slower," Chuah added. The group's business in medical equipment, glove recycling machine, and semi-conductor automated equipment was still sustaining and would offset the slower sales in LED segment, he added. Elsoft Research Bhd managing director C.E Tan said the market for low brightness LEDs was saturated, and growth was slower. "So far, we still have orders for our LED testers supporting the mid to high-end market to deliver until the end of the year. "These LED testers are for testing mid to high brightness LEDs used for street lighting and the automotive industries," he said. There is excess supply because some 25 new LED manufacturers have entered into the market, while 75 LED manufacturers have increased capacity over the last two years, according to the Austin-based IMS Research report. "In China, its metallorganic chemical vapor deposition (MOCVD) equipment programme is expected to result in some 1.6 billion yuan spending on MOVCD tools from 2010 to 2012 on machinery, which has encouraged existing Chinese LED manufacturers to expand capacity. "In 2011 and 2012, the supply growth is expected to outpace demand growth with no additional tools installed in 2012," the report said. Another reason that demand was growing slower than supply was because there had been a large reduction in LEDs used in televisions and monitor panels since the third quarter of last year. "This large reduction was achieved through improvements in LED luminous efficiency as well as improvements in light guide distribution efficiency, panel transmissivity and optical film optimisation. "By reducing the number of LEDs, panel makers were able to migrate from four to six LED light bars per panel to just two light bars per panel significantly cutting costs," the report said. Meanwhile, Malaysian American Electronics Industry (MAEI) chairman Datuk Wong Siew Hai said the semiconductor and electronics industry in the country in the second half was expected to improve compared with the first half 2011. "The ICs and data storage business, for example, are still doing well. "Compared with the same period last year, the growth in the semiconductor and electronics industry is expected to be slower," he said. Wong added that the total export sales by MAEI were expected to stabilise to RM51bil this year, a 5% growth over 2010. Full Feed Generated by Get Full RSS, sponsored by Used Car Search. |
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