UBS loses function in bond deal for Chinese firm on outcry over pig comment

By Julie Zhu and Sumeet Chatterjee

HONG KONG, June 17 (Reuters) – UBS has misplaced a lead function on a U.S. Dollar bond deal for country-sponsored China Railway Construction Corp, just days after a Chinese outcry over a senior UBS economist’s use of “pig” in connection with Chinese food charge inflation.

Chinese Food

While UBS apologized for the commentary on Thursday and put the analyst on the go away on Friday, the furor led Haitong International Securities, a leading Chinese brokerage, to suspend all enterprise with the Swiss institution as some Chinese bankers and analysts criticized the financial institution for lack of cultural cognizance.

The choice changed into taken due to the talk over the pig remark, in keeping with supply at the financial institution, who declined to be named as he turned into no longer accredited to speak to media.

A UBS spokesman declined to comment.

The upset stemmed from observation via Paul Donovan, worldwide chief economist at UBS’s wealth management enterprise because 2016, in a podcast on Wednesday, which became then transcribed and published on the bank’s website. It has seen that been taken down.

In the podcast, Donovan said that customer expenses in China had risen because of sickness among pigs.

“Does this depend? It topics if you are a Chinese pig. It matters if you like consuming red meat in China,” Donovan said in remarks a few took offense at because of a perceived reference to people, no longer farm animals.


The fierce outcry has taken many other western banks by surprise. At a minimum, Wall Street establishments bankers stated their colleagues have discussed which words they have to keep away from following the pig furor.

UBS analysts have also been asked informally through managers to be very careful about using phrases regarding China or Chinese entities, resources with understanding stated.

“One of our economists came to me and requested me if we need to put together a list of words that we should usually avoid citing in China-related reports. I thought he become joking, but he became critical,” said one senior banker.

The row comes as global investment banks are gearing up for a push into China following rule modifications that now allow them to control their securities joint ventures.

UBS became the primary, in November, to win approval underneath the rule changes. In March, JP Morgan and Japan’s Nomura additionally got the nod.

“You can not forget about the timing of this controversy — overseas brokerages are looking for a bigger footprint in China, and the nearby homes are starting to get concerned about the effect of that on their marketplace share. So they’re not going to miss any excuse to go after the foreigners,” said a banker whose agency has been authorized for 51% manage.

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