Piper Jaffray to call it a day in Hong Kong
(31 July 2012 – Hong Kong) United States investment bank, Piper Jaffray & Co plans to leave Hong Kong in September as its operations continue to lose money in a souring economy.
The company will leave Hong Kong either through a sale of the business or a shutdown.
Analysts believe a shutdown is the likelier option considering the increasingly unfavourable business environment in Hong Kong. They said that it could be difficult for Piper Jaffray to find a buyer now.
Piper Jaffray said it does not have the financial resources to expand its Hong Kong business to handle more than initial public offerings or to absorb the significant losses in that market.
It expects to earn between US$13 million (A$12.4 million) and US$18 million from its exit.
The company’s net income fell to US$6.9 million during the second quarter, down from the US$10.7 million year-on-year.
Net revenue for the quarter fell almost 20 percent to US$106 million on lower investment banking revenues, which fell by a fourth from year-earlier levels.
Analysts believe a shutdown is the likelier option considering the increasingly unfavourable business environment in Hong Kong. They said that it could be difficult for Piper Jaffray to find a buyer now.
Piper Jaffray said it does not have the financial resources to expand its Hong Kong business to handle more than initial public offerings or to absorb the significant losses in that market.
It expects to earn between US$13 million (A$12.4 million) and US$18 million from its exit.
The company’s net income fell to US$6.9 million during the second quarter, down from the US$10.7 million year-on-year.
Net revenue for the quarter fell almost 20 percent to US$106 million on lower investment banking revenues, which fell by a fourth from year-earlier levels.
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