(Bloomberg) -- HSBC Holdings Plc retracted a memo offering a downbeat assessment of Qatar’s economy earlier this year and sent out research that offered a more positive outlook days later, people familiar with the matter said.
A Dubai-based equity sales trader sent the original note to clients in May following a trip to Qatar, the people said, asking not to be identified as the information is private. The memo cited feedback from local investors, who painted “a pretty bleak picture,” according to a copy reviewed by Bloomberg News.
The note, which referred to weakness in the Qatari real estate and stock markets, and an economy “in the doldrums,” was retracted soon after it was sent, people familiar with the matter said. HSBC published fresh research days later with a more bullish view — titled “Well anchored.”
Senior executives at the bank reached out to heads of major Qatari institutions after the research was published, according to some of the people. In at least one of the conversations, they stressed that the note reflected the trader’s personal views and not HSBC’s.
It’s unclear whether the trader faces any disciplinary action. A spokesperson for HSBC said the bank wouldn’t comment on individual employees or clients.
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The saga is the latest example spotlighting the difficulties of doing business while navigating local relationships in parts of the world. Less than a year ago, HSBC’s head of public affairs stepped down after criticizing the British government’s handling of its relationship with China.
Qatar is an important market for HSBC, which was one of the first banks to set up in the gas-rich country and recently completed 70 years of operations there. Outgoing Chief Executive Officer Noel Quinn has over the years led the bank’s efforts to court local officials, and traveled to Doha in May.
Regionally, the firm’s rapidly expanding its business catering to the ultra rich. Aladdin Hangari, a key relationship manager for the Qatari royal family while at Credit Suisse, recently joined HSBC to lead its Middle East and North Africa private banking business.
The bank also has ties to Qatar in London, where the building that houses its headquarters is owned by the Gulf country’s sovereign wealth fund. HSBC has said it plans to downsize to a smaller office over the next two years.
HSBC’s second note to clients offered a more positive outlook.
“We remain comfortable with near- and long-term prospects that continue to be underpinned by robust export earnings and balance sheet strength,” according to that e-mail.
At the time, stocks in Doha were among the world’s worst performers as investors cut their exposure to banks. The index has since recovered some of those losses, but is still down for the year.
--With assistance from Farah Elbahrawy and Harry Wilson.
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