A top analyst at UBS has taken a leave of absence after his inclusion of the phrase “Chinese pigs” in research commentary this week on the country’s rising pork prices triggered an outcry among the Chinese financial community.
Paul Donovan, chief economist at UBS Global Wealth Management, referenced climbing Chinese consumer prices and linked the inflation increase to the recent African swine fever epidemic, which has buoyed pork prices in the world’s second largest economy. U.S. meat executives estimate that hundreds of millions of hogs have succumbed to the virus since August 2018.
“Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world,” he said, in the podcast, which was later removed from the bank’s website.
His commentary sent tremors throughout Hong Kong’s community of Chinese financial professionals. A letter from the Chinese Securities Association of Hong Kong called for Donovan’s dismissal. Haitong International, the overseas arm of a Chinese brokerage, said they had suspended dealings with UBS.
“We confirm that we have asked Paul to take a leave of absence as we review this matter, to evaluate whether furthers steps need to be taken,” said a UBS spokesperson on Friday.
“We apologize unreservedly for any misunderstanding caused by these innocently intended comments by Paul Donovan. We have removed the audio comment from circulation. To be clear, this comment was about inflation and Chinese consumer prices rising, which was driven by higher prices for pork,” they said.
Donovan said in a Bloomberg TV interview on Thursday that he had “made a mistake and I unwittingly used hugely culturally insensitive language.”
Hao Hong, head of research at Bocom International, wrote in a tweet on Wednesday that “some saying it’s an unfortunate misunderstanding. But it’s hard to believe that many smart people in Chinese finance community collectively misunderstood this comment.”
UBS was ranked among the top 10 advisors in Asian mergers and acquisition deals in 2017 and 2018, according to Dealogic.
But its business has tailed off this year after Hong Kong’s Securities and Futures Commission banned UBS from sponsoring deals for a year for failing to conduct sufficient due diligence on Chinese companies that it helped list in Hong Kong’s stock exchange.
Donovan’s suspension recalls previous incidents that have landed Asia-based analysts at Wall Street banks in hot water. Andy Xie, a former Asia economist at Morgan Stanley, left the bank in 2006 after he cited money-laundering for Singapore’s success.
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