Banking giant HSBC has ended its five-year sponsorship of a closely watched series of business activity surveys, financial research group Markit, which compiles the data, said Friday. The HSBC Markit Emerging Markets monthly purchasing managers' indexes (PMI) are seen by economists as a key gauge of manufacturing activity in China and other developing countries, with the results frequently shaking world stock markets.
The companies' China PMI in particular is scrutinised for clues to the health of the world's second biggest economy - despite often contradicting the official gauge released by Beijing. "HSBC's sponsorship of Markit's Emerging Market PMIs has been a successful relationship over the past five years," Teresa Chick, a spokeswoman for Markit, told AFP.
"The sponsorship arrangement is now coming to an end and we will announce replacement sponsors soon," she said. HSBC was not immediately reachable for comment. According to several financial media outlets, Beijing had become unhappy with the HSBC index, which frequently comes in below the government figures, depicting a much gloomier situation than that posited by China's National Bureau of Statistics.
Last month, the official Chinese PMI suggested a significant increase in manufacturing activity in May, with its index at 50.2, the highest level in six months, while the index calculated by Markit and published by HSBC showed a sharp contraction, at 49.2. In both indexes a reading above 50 marks an expansion in activity, while a level below this threshold indicates a contraction. The difference may also be explained by the fact that Markit's survey focuses on small and medium-sized enterprises, particularly from the private sector, while the government gauge mainly covers large state-run groups.
The move by HSBC to end the tie-up comes as the bank carries out a radical cost-cutting overhaul, saying earlier this month it plans to cut its global workforce by up to 50,000 in an attempt to boost lacklustre growth. The bank is also exiting Brazil and Turkey and considering relocating its headquarters back to Asia from London.
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