国际投行报告-全球投资策略-固定收益与ESG手册

|01PUBLICHSBC|01PUBLICbondportfolios.nthematicimpactinvestingdifyouwanttogodeepergetintouchataskresearch@tal|01PUBLICHSBC|01PUBLICrsago|02PUBLICHSBC|02PUBLICHSBCwiderspreadsforurablecialrisksHaloEffect&Greeniumeadswiderbyfriendlysectorsorcompanies1.ESGmovesfixedincomemarketsinthreekeywaysnvestorscompetefornstrumentsCreditAnCreditAnalysisDivestmentFixedIncomeMarketImpactDivestmentFixedIncomeMarketI|03PUBLICHSBC|03PUBLICondsaremoreindemandthannongreensthatcanonlybuygreenbonds.Higherdemandtendstoresultinbetterpricingforissuersandtighterprimarymarketandsecondarymarketspreads.Inaddition,wealsonotethatissuerswhoissuelabelledbondsforthefirsttimehavea“Haloeffect”–atthetimeoftheissuanceofthefirstgreenbondallotherbondsfromtheissuerout-perform.glabelledbondsisnotthetedimpactanissuersfinancialprofileeitherbychangingtheirprofitabilityorbalancesheetorboth.Thiswillresultinachangeintheirriskprofilewhichmightthenfeedthroughintospreads.Wehaveseenthistrendglobally,romAsiansteelcompaniestoEuropeanpowerelpsnvestorsidentifyandmitigatetheimpactofESGriskfactorsonperformance.3.InvestorsnowroutinelyfactorinESGconsiderationsintotheirdecisionmaking.Ifenoughaclearanddemonstrableimpactonbondpricing.AprominentexampleisthecollectivedecisiontoavoidTobaccobondswhichhasledtotheunderperformanceofthatsectorinrecentyears.WearestartingtoseeacomparableprocessplayoutintheOil&Gassectorinsome|04PUBLICHSBC|04PUBLIC2.ArangeofapproachestoembeddingESGIntegrationNegativescreeningNormsscreeningPositivescreeningThematic–BondlevelImpact–IssuerlevelDescriptioniskfactorsincreditanalysisExcludingissuersbasedonactivity/sectorExcludingissuersbasedonbehaviourIncludingissuersbasedon“best-in-class”metricInvestinginuse-of-proceedsbondsAssessingissuerimpactonsustainabilitythemeAimkadjustednsIncreasecostoffundingto“harmful”sectorsegoodperformanceacrosscorporatesReducecostoffundingfordesirableprojectsPositiverealworldimpactKeyfeaturesHighlightingkeyriskfactorsandimpactoncreditqualityanoncertainsectorsoftendrivenbyclientrequirementsOftenreferstobroadernationalstandardsTypicallywouldusesomefESGscoringtodeterminebest-performersLimited,butexpandingrangeofbondsAddinganadditionaldimensiontoinvestmentbysettingnon-financialrcePRIHSBCocialobjectivesallowinginvestorstoclearlydemonstrateimpactSecondlyWiththosetwoprinciplesinmindfixedincomeinvestorscanapplyarangeofdifferentapproachestoimplementingESGprinciples.Mostcommonplaceisintegrationinredtoies|05PUBLICHSBC|05PUBLICveESGfactorsthough–positivescreeninginvolvesusingnonlabelledbondsandresultsinanegativegreenium,whicheyinpracticecertainIssuerlevelthematicinvestingintroducesathirdreturnbutalso“impact”ononeormoresocialandnyinassessingtheimpactofaportfolionofissuersonintensityorteissuerswithlowintensityorambitiousemissionreduction|06PUBLICHSBC|06PUBLICSource:HSBCMarketinMarketing3.KeyquestionsinFixedIncomeESGIntegrationNegativescreeningNormsscreeningPositivescreeningThematic–BondlevelImpact–IssuerlevelProcessHowshouldIfactorShouldIexcludecertainShouldIexcludeissuersShouldIdistinguishShouldIsetathresholdESGintomycreditsectorsbecauseofbecauseofweakESG?betweendifferentforminimumESGsessmentshadesofgreen?standardsperissueroracrossmyportfolio?PerformanceShouldIexpecttoout-HowdoesnegativeCanwelinkweakESGCanwedemonstrateDogreenbondsout-DoIneedtosacrificeperformbyusingESG?screeningimpactbondperformancetobondthatESGgeneratesout-perform?Dodarkergreenreturntopursuemyperformance?performance?performanceincredit?bondsout-perform?impactbasedstrategy?FactorsinESGriskfactorsimpactingtShouldIprioritiseningeswhichinvestorscareoutWhatarethekeyprojectsthatgreenbondsnceHowshouldIcalculatecarbonintensity?FinancialProductsesfrommoreelabelledbondsnclassportfolio?WhatarethedifferencesbetweengreenbondsMeasurementShouldIusescoringtoShouldItryandWhatdataprovidersforDogreenbondsreallyDoIneeddifferentistinguishbetweenESGscoringaretheregenerateadditionalmeasuresforeachissuersin“bad”ESGctsectors?What’sthebestwaytodemonstratemyESGpractices?DoespositivescreeningstillleavemewithpotentiallycontroversialissuersandcanIexplainthistomyclients?Whataremycompetitorsdoinginthisfield?|07PUBLICHSBC|07PUBLICHSBCICMAGreenBondICMAGreenBondPrinciplesandICMASocialBondPrinciplesEligiblegreenprojectsEligiblesocialprojectsnewableenergyAffordablebasicinfrastructureiciencytoessentialservicesPollutionpreventionandcontrolAffordablehousingEnvironmentallysustainablemanagementoflresourcesandlanduseEmploymentgenerationandprogramsesignedtopreventandoralleviateunemploymentstemmingfromsocioeconomiccrises,includingSMEfinancingandmicrofinancerrestrialandaquaticbiodiversityconservationFoodsecurityandsustainablefoodsystemsCleantransportationSocioeconomicadvancementandempowermentSustainablewaterandwastewatermanagementatechangeadaptationCirculareconomyadaptedproducts,productiontechnologiesandprocesses;and/orcertifiedeco-efficientproductsings1.TypesoflabelledbondsGreenGreenbonds¡Fundenvironmental¡NotsecuredagainstprojectsprojectsSocialSocialbonds¡Fundsocialprojects¡NotsecuredagainstprojectsSustainabilitySustainabilitybonds¡Fundamixofgreen¡NotsecuredagainstandsocialprojectsprojectsSustainabilitySustainability-linkedbonds¡DoNOTfundprojects–canbeusedforopex,capex,refi¡Instead,couponorprincipalincreasesifenvironmentalorsocialtargets|08PUBLICHSBC|08PUBLICGreenbondsare“useofproceeds”bondswheretheproceedsraisedbyissuingagreenbondarering-fencedtodesignatedenvironmentalprojects.GreenbondsaregovernedbytheICMAGreenBondPrincipleswhichlisttheeligibleprojecttypes,suchasrenewableenergy,energyefficiencyorcleantransportation.Theyalsomakerecommendationsontheprocessforprojectevaluationandselection,managementofproceeds,andreporting.Butunliketraditionalprojectfinance,greenbondsarenotrojectstheyfinanceInsteadthebondholderispaidfromthegeneralcashflowsoftheissuerandsotakesonthecreditriskoftheissuerSocialbondsarealso“useofproceeds”bondswheretheproceedsraisedbyissuingasocialbondarering-fencedtodesignatedsocialprojects.SocialbondsaregovernedbytheICMASocialBondPrincipleswhichlisttheeligibleprojecttypes,suchasaffordablebasicinfrastructure,accesstoessentialservicesoraffordablehousing.LikeyarenotsecuredagainsttheprojectstheyfinanceandthebondholdertakesonthecreditriskoftheissuerSustainabilitybondsfinanceamixofenvironmentalandsocialprojects,givingtheissuergreaterflexibilitySustainability-linkedbondsorSLBsarearecentdevelopment.Unlikegreen,socialorsustainabilitybonds,theydonotfundprojects.Thustheissuercanusetheproceedsforanypurpose,includingrefinancingexistingdebtoropex.WhatmakesthemdifferentfromconventionalbondsisthattheissueragreestocertainenvironmentalorsocialtargetsandiftheyfailtomeetthosetargetstheinterestpaymentsontheSLBisincreasedbyapre-agreedpenaltyamount.Issuanceoflabelledbondshasseenexponentialgrowth8006004002000Sustainability-linkedbondsSustainabilitybondsSocialbondsGreenbonds1516171819202122Q1Source:HSBCcalculations,Dealogic,Bloombergasof31Mar22|09PUBLICHSBC|09PUBLIC%%2%%dsdafurtherUSDtrnSocialbondstookoffstronglyin2020withtheonsetofthepandemic.AndwhilethefirstnballyButotherregionsarehindwhiletheGBPcorporatemarketistheUSDcorporatemarketwhichisoverybehindButitdoesseemtobefollowingthesamepathastheEURcorporatemarket.Butthedistributionoflabelledbondsamongstcorporatesremainsuneven.sectorstthearbonisationaybegas%oflabelledbondsinindices,shiftedbackintimetomatchEURt83t283pt493EURHYt332016201720182019202020212022Source:HSBCcalculations,IHSMarkit,Dealogic,Bloomberg.BasedoniBoxxbondindices.%labelledinEURIGcorpsector40%35%30%25%20%%0%BSustainabilitySocialeenAAutosBasicBasicRsrcsCChemicalsCons&MatsFoodFood&BvgHealthHealthCareIndGds&SvsMMediaOilOil&GasPnl&HholdGdsRRetailTecTechTTelcosTrvlTrvl&LsreUUtilitiesBanksBanksFinFinServicesIInsuranceRealRealEstateSource:HSBCcalculations,IHSMarkit,Dealogic,Bloomberg.BasedoniBoxxbond|10PUBLIC HSBC|10PUBLIC EUR60bnEUR40bnEUR60bnEUR40bnEUR20bn0Supranationalandagency(S&A)issuershavealsobeenstrongissuersofgreenndsAndwhiletherehasbeenlimitedissuanceofsocialandsustainabilityhavemadeextensiveuseofthesebondtypesMosthavebusinessmodelsthatareinherentlyalignedwithsocialandgreenobjectives.ofitsSUREprogrammewhichwaslaunchedinresponsetothepandemicandlaunchedtheNextGenerationlanstoprovideuptoEURbninfinancialsupportedtofinancethisarematThefirstNGEUgreenbondwasissuedinuntilEuropeansovereignlabelledissuancehasalmostentirelybeenintheformofgreenbonds,butonly1.5%ofEURand0.9%ofGBPindexeligiblesovereignbondsaregreen.However,issuancegrewstronglyin2021.Whilstsomeissuershavenotedthedifficultyinfindingsufficientprojectsforsovereigngreenbonds,inpartdueto“competition”fromtheEUforeligibleprojects,issuerscouldalsouseotherlabelledbondsformatssuchassocialorsustainability.EURS&Aissuancebytype0%GSS80%60%Sustainability40%l20%%2018201920202021EuropeansovereignlabelledbondsupplyGreenSustainability2016201720182019202020212022SourceHSBCBloombergasof17Sep2021)Source:HSBCcalculations,Dealogic.Europe+EMEuropeall|11PUBLIC|11PUBLICketshard004000400cialprojecttypeforsocialandsustainabilitybonds%ofbondswhichmentionprojecttsRenewableenergyEnergyefficiencyPollutionpreventionNaturalresourcemanagementBiodiversityCleantransportationWaterClimatechangeadaptionEco-efficientGreenbuildingsAffordablebasicinfrastructureAccesstoessentialservicesAffordablehousingEmploymentgenerationSocioeconomicadvancementGreenandsustainabilitySocialandsustainabilitySource:Dealogic,Bloombergasof18Feb22.*ExcludesbondsforwhichDealogicdoesnotreportuseof|12PUBLICHSBC|12PUBLICSource:HSBCcalculations,Bloombergasof11Mar2022Asiafocus–AsiaexJapanUSDlabelledbondsgrowingstrongly40022%29%22%29%201320142015201620172018201920202021YTDGreenPandemicSocialSustainability-LinkedSustainability%toAxJUSD|13PUBLICHSBC|13PUBLICGreeniumbpAverageexcessspreadchangeGreeniumbpAverageexcessspreadchange(bp)5-252.GreeniumnegativeacrosstimeandmarketstalandsocialprojectssoutperformthemarketWethinkthisisbecauseissuinglabelledbondGreeniumisstructurallynegative…USDUSDcorp2016201720182019202020212022…but0-12-3-4variesbymarketdrivenbydemandandsometimeslimitedsupplypp20172018201920202021Source:HSBCcalculations,IHSMarkit,Dealogic,Bloombergasof3Mar22Source:HSBCcalculations,IHSMarkit,Dealogic,Bloombergasof3Mar22|14PUBLICHSBC|14PUBLIC3.Thewayforward:ThepullofclientdemandandpushofpolicyivearegrowingquicklyMoreimportantlyromisesustainableinvestmentsareindeeddeliveringthem%assets%%assets%2%%Dec-19Mar-20Jun-20Sep-20Dec-20Mar-21Jun-21Sep-21Dec-21MonthyfundflowsMonthlyfundMonthlyfundflows2%%-2%-4%leDec-19Mar-20Jun-20Sep-20Dec-20Mar-21Jun-21Sep-21Dec-21SourceHSBCcalculationsRefinitivLipperasofDecEURincETFs)Source:HSBCcalculations,RefinitivLipper,asof31Dec21(EUR,incETFs)|15PUBLICHSBC|15PUBLICEUEUTaxonomy¡CatalogueofeconomicactivitieswhichmakeasubstantialcontributiontooneoftheEU’ssixenvironmentobjectives¡MustDoNoSignificantHarmtoanyofthesixobjectivesEUEUGreenBondStandard(draft)¡StricterthanbutconsistentwithICMAGreenBondPrinciples¡ProjectsmustalignwithEUTaxonomySustainableSustainableFinanceDisclosureRegulation¡DefinesArticle8“lightgreen”andArticle9“darkgreen”funds¡Butallfundsmustreport“doublemateriality”i.e.impactoffundsonsustainabilityandsustainabilityonfundsHSBCInternationalpoliciesPolicyDateChina:GreenBondEndorsedProjectcataloguesedAprilsedAprilbasedTaxonomyforfinancialinstitutionUnderdevelopmentiteriafortheremainingfourobjectivesshouldcomeintoforceatthestartofTheproposedEUGreenBondStandardisconsistentwithbutstricterthantheEUclassifyinggreenactivitiesandinvestments|16PUBLICHSBC|16PUBLICESGIntegrationESGIntegration(Environmental/SocialImpact)1.Fromrisktofinancialimpactceupsidedecanbelargeinkingandonlythenwillspreadsreactyaregulationorpolicywhichvestorcommunitycouldcollectivelyshuncostoffinancing.apollutionincidentoranewetohealthconcernsstocounteracttheirfinancialprofilebuttotheextentthattheyarenotndthepriceoftheirbondswillfallreflectingthehigherdefaultrisk.Mitigation(Managementresponse)TransmissionTransmission(Financial/(Financial/Spreadimpact)(Regulation/Policy)InvestorBehaviour(Environmental(Environmental/(Additionalyield)SocialImpact)SocialImpact)esult(Spreadimpact)(NegativeScreening/Divestment)HSBC|17PUBLICHSBC|17PUBLICESGIntegrationESGIntegration(Environmental/SocialImpact)2.Integration:environmentalriskukushimaakenedtheircreditproducerswentfrom“A”to“BBB+”andtheimpactonsomeissuersposuretofossilfuelpowerplantortonuclearercorrectlyconcludedthatmuchofthedamagetocreditprofileswasigherriskpremiumMitigation(Managementresponse)UtilitiesexampleRolloutofrenewablesTransmissionmechanism(Regulation/Policy)Result(Financial/Spreadimpact)UtilitiesinvestinmoresustainablepowerWholesalepowerpricesloweraslessefficientplantsmothballedLowerprofitabilityoffossilfuelWholesalepowerpricesloweraslessefficientplantsmothballedHSBCUtilitiessufferedasrenewableswererolledoutAA-ASpread(bps)4000-10Powergenerators’ASWrelativetoEURIGAveragepowergenerators’ratings(RHS)101112131415161718Source:HSBCcalculations,Markit,B|18PUBLICHSBC|18PUBLICSource:iBoxxADBIIndex3.Asia:Integration;focusongovernancefactorsareofparticularrelevanceforAsiancreditinvestorsAforwardlookingscenarioanalysiscanhelptomodeltheimpactofESGrisks,particularlyhowgovernancecaninfluencecreditworthiness.ThekeycomponentsofthisapproacharespecificESGfactors,thetimehorizonandcorporateresponses.Differentcombinationscanproducearangeofoutcomes,makingitdifficulttopackagethefullspectrumofESGelementsintoa“onesizefitsall”model.RatherthanjudgingcorporatespurelyonhistoricalESGdata,wemixqualitativeandquantitativeapproachestolookatthepotentialimpactoncreditandfinancialprofilesbylookingat:1)thedevelopmentofESGconcernshowtheytranslateintopotentialoperationalissuesandmanagementactionstoaddresstheissues.ThisintegratedapproachlinksESGfactorstospreadmovementsviaatransmissionmechanism.AnexamplewouldbethetighteningregulatorymeasuresforChineseinternetcompanies,suchasanti-monopolyrules.Thegovernmentimplementedcomprehensiverulesacrossinternetactivities,whichhavealteredthesectordynamicsandcompetitionamonginternetplatformoperatorsThecompanieshavetriedtoadjusttheirexistingbusinessstrategies.Asaresult,theiroperatingmarginshavebeenlowered,whilstspendingoninvestmentshasincreasedtofundnewbusinessgrowth.Assuch,thechanginggovernancelandscapehasledtoapreadsofthetechsectorrelativetotheAsiaIGmarketasawhole.nancetheGinESGisthemostinfluentialfactorintermsofbondvaluations.Encouragingly,aveseensignsthatinvestorsandissuersarestartingtopaymoreattentiontoenvironmentalandsocialconcerns.Thisisbackedbygovernments’commitmenttowardscarbonneutralityandrelatedenvironmentalpoliciesaswellasrisinginvestorconsiderationofESG.FrameworkforESGintegrationincorporatecreditexample:ChinaInternetStricterlegalandregulatoryStricterlegalandregulatorymeasure,e.g.anti-monopolyrulesrevisebusinessstrategies,investintonewinitiativesOperatinglandscapechanges,shorttermOperatinglandscapechanges,shorttermoperationaldisruption,marketcompetitionincreaseslowermargin,slowerpaceofbusinessexpansionHSBCChinainternetbondssufferedfromtightgovernmentpoliciesAccum.spreadchange(bpAccum.spreadchange(bp)29024090404/184/194/204/184/194/207/2010/204/21/2110/2122IADBIA|19PUBLICHSBC|19PUBLICSz=HDIz-scoreGz=WGISz=HDIz-scoreGz=WGIz-scoreEnvironmentSocial3210-121.Impactinvesting:thechallengeofEMsovereignsInimpactinvestingwedonottrytoarguewhetherESGaffectsperformance–rather,wetrytorewardissuerswithbetterESG.analysisiscomplicatedbyincomedisparitiesbetweendifferentcountriesInparticularkeyESGestronglycorrelatedwithwealthPoorercountrieshavelowersocialindicatorsmeasuredbytheHumanDevelopmentIndexandlowergovernanceindicatorsherhandrichercountrieshavelowerenvironmentalscoresmeasuredbycarbonintensityperatorofESGwouldrewardrichercountriesattheexpenseoforeronesEEz=(-C02/capita/year)z-score1.00.50.0-1.0-1.5010000200003000040000GDP/capita210-12Governance010000200003000040000GDP010000200003000040000GDP/capitaGDP/capitaSource:HSBCcalculations,WorldBankGroup,UNDPasofSeptember2020Bycomparinghowwellacountryisdoingrelativetothedevelopmentthatyouwouldexpectgiventheirincomelevels,investorscanavoidtakingfromthepoortogiveto|20PUBLICHSBC|20PUBLICToaccess#WhyESGMattersclickhereDifferenceDifferencebetweenseniortobaccoandnon-financialspreads(bps)Dbn2.Investorbehaviour:theexampleoftobaccoetasawholeTobaccobondsoverfiveyears0400-40-60Underperformance1.Tobaccoisasingle-Aratedsectortradingattighter(better)spreadlevelsthantheindexasawholewhichisratedhighBBBonaverage.23.Spreadpressurestartstoaccelerateevenastobaccocreditqualityremainsbetterthanindexaverage.553344112.MomentumbehindESGincreditstartstobuild–largerpensionfundsinAustralia,CanadaandEuropecommittoremovetobaccofromportfolios.4.COVID-19pandemicresultsinrotationtowardsmoredefensiveissuerswithcyclicalsunder-performing.5.Economicrecoveryseescyclicalsout-performandtobaccounder-performanceresumes.20162017201820192020202120228,0006,0004,0002,0000 USDEURAssetspledgedtoTobaccoFreeFinancePledge(RHS)Source:Markit,HSBC|21PUBLICHSBC|21PUBLICDisclosureappendixThefollowinganalyst(s),whois(are)primarilyresponsibleforthisdocument,certifies(y)thattheopinion(s),viewsorforecastsexpressedhereinaccuratelyreflecttheirpersonalview(s)andthatnopartoftheircompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendation(s)orviewscontainedinthisresearchreport:StevenankWillThisdocumenthasbeenissuedbytheResearchDepartmentofHSBC.HSBCanditsaffiliateswillfromtimetotimeselltoandbuyfromcustomersthesecurities/instruments,bothequityanddebtincludingderivativesofcompaniescoveredinHSBCResearchonaprincipaloragencybasisoractasamarketmakerorliquidityproviderinthesecurities/instrumentsmentionedinthisreport.Analysts,economists,andstrategistsarepaidinpartbyreferencetotheprofitabilityofHSBCwhichincludesinvestmentbanking,sales&trading,andprincipaltradingrevenues.Whether,orinwhattimeframe,anupdateofthisanalysiswillbepublishedisnotdeterminedinadvance.Fordisclosuresinrespectofanycompanymentionedinthisreport,pleaseseethemostrecentlypublishedreportonthatcompanyavailableat/research.Additionaldisclosures1Thisreportisdatedasat06May2022.2HSBChasproceduresinplacetoidentifyandmanageanypotentialconflictsofinterestthatariseinconnectionwithitsResearchbusiness.HSBC'sanalystsanditsotherstaffwhoareinvolvedinthepreparationanddisseminationofResearchoperateandhaveamanagementreportinglineindependentofHSBC'sInvestmentBankingbusiness.InformationBarrierproceduresareinplacebetweentheInvestmentBanking,PrincipalTrading,andResearchbusinessestoensurethatanyconfidentialand/orpricesensitiveinformationishandledinanappropriatemanner.3Youarenotpermittedtouse,forreference,anydatainthisdocumentforthepurposeof(i)determiningtheinterestpayable,orothersumsdue,underloanagreementsorunderotherfinancialcontractsorinstruments,(ii)determiningthepriceatwhichafinancialinstrumentmaybeboughtorsoldortradedorredeemed,orthevalueofafinancialinstrument,and/or(iii)measuringtheperformanceofafinancialinstrumentorofaninvestmentfund.DisclaimerThisdocumenthasbeenissuedbyTheHongkongandShanghaiBankingCorporationLimited,whichhasbasedthisdocumentoninformationobtainedfromsourcesitbelievestobereliablebutwhichithasnotindependentlyverified.NeitherTheHongkongandShanghaiBankingCorporationLimitednoranymemberofitsgroupcompanies(“HSBC”)makeanyguarantee,representationorwarrantynoracceptanyresponsibilityorliabilityastotheaccuracyorcompletenessofthisdocumentandisnotresponsibleforerrorsoftransmissionoffactualoranalyticaldata,norisHSBCliablefordamagesarisingoutofanyperson’srelianceonthisinformation.Theinformationandopinionscontainedwithinthereportarebaseduponpubliclyavailableinformationatthetimeofpublication,representthepresentjudgmentofHSBCandaresubjecttochangewithoutnotice.Thisdocumentisnotandshouldnotbeconstruedasanoffertosellorsolicitationofanoffertopurchaseorsubscribeforanyinvestmentorotherinvestmentproductsmentionedinitand/ortoparticipateinanytradingstrategy.Itdoesnotconstituteaprospectusorotherofferingdocument.Informationinthisdocumentisgeneralandshouldnotbeconstruedaspersonaladvice,givenithasbeenpreparedwithouttakingaccountoftheobjectives,financialsituationorneedsofanyparticularinvestor.Accordingly,investorsshould,beforeactingonit,considertheappropriatenessoftheinformation,havingregardtotheirobjectives,financialsituationandneeds.Ifnecessary,seekprofessionalinvestmentandtaxadvice.Thedecisionandresponsibilityonwhetherornottopurchase,subscribeorsell(asapplicable)mustbetakenbytheinvestor.InnoeventwillanymemberoftheHSBCgroupbeliabletotherecipientforanydirectorindirectoranyotherdamagesofanykindarisingfromorinconnectionwithrelianceonanyinformationandmaterialsherein.Pastperformanceisnotnecessarilyaguidetofutureperformance.Thevalueofanyinvestmentorincomemaygodownaswellasupandyoumaynotgetbackthefullamountinvested.Whereaninvestmentisdenominatedinacurrencyotherthanthelocalcurrencyoftherecipientoftheresearchreport,changesintheexchangeratesmayhaveanadverseeffectonthevalue,priceorincomeofthatinvestment.Incaseofinvestmentsforwhichthereisnorecognisedmarketitmaybedifficultfori