Piper Jaffray to leave Hong Kong as economy sours

US investment bank Piper Jaffray & Co will exit its money-losing operations in Hong Kong this September

The company will leave Hong Kong either through a sale of the business or a shutdown. Analysts, however, believe a shutdown is the likelier option considering the increasingly unfavorable 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 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% to US$106 million on lower investment banking revenues, which fell by a fourth from year-earlier levels.

Based in Minnesota, Piper Jaffray sells financial advice, investment products and transaction execution within targeted sectors of the financial services marketplace. Through its principal subsidiary, Piper Jaffray & Co., it targets corporations, government, non-profit entities, institutional investors, and the financial advisory needs of private individuals.