HSBC has hired Danny Alexander to lead its new infrastructure unit to tap opportunities associated with the global shift to a low carbon economy.

The former UK minister will join HSBC Infrastructure Finance (HIF) as chief executive in November. The unit will take part in infrastructure and project finance deals, according to a post on Alexander’s LinkedIn page on Tuesday.

“HIF will pursue a meaningful share of infrastructure financing and advisory opportunities associated with the transition to a low carbon economy in strategic markets,” he wrote in the post.

“The new role is based in the UK, but with HSBC’s deep roots and great strength in Asia, I expect to continue to spend a lot of time in this region … It will be a huge challenge – I am looking forward to getting started.”

The move comes as HSBC joins a growing list of banks tightening their lending to high-polluting sectors to get in line with the global goal of net-zero emissions by 2050.

The new unit will incorporate parts of the bank’s global banking real asset finance team, which includes infrastructure finance, export finance and portfolio management, according to a Reuters report, which cited an HSBC internal staff memo.

HIF will also “work closely with the bank’s CMB infrastructure finance team, and oversee its Pentagreen Capital joint venture, a sustainable infrastructure debt unit launched with Singapore investment firm Temasek”, the report added.

Alexander, the former chief secretary to the treasury until 2015, will step down from his position as vice-president for policy and strategy at Asian Infrastructure Investment Bank (AIIB) in October.

Alexander joined the Beijing-based multilateral development bank in February 2016, a month after it officially began operations, according to a statement from AIIB. He oversaw environmental and social policies and drove AIIB’s strategic direction, sectoral and country priorities, investment strategy and operating budget, the statement added.

AIIB president Jin Liqun said in the statement that Alexander has been instrumental in expanding their membership, shaping strategic direction, and strengthening the policy framework.

Alexander expressed his concern about the challenges of global climate transition and his expectations for the new role in his LinkedIn post.

“To my mind, the most important development change facing the world now is the climate transition,” he wrote.

“AIIB and other multilateral development lenders will play a crucial role, delivering the agenda set out in various COP meetings and the G20. But the scale and speed will only be achieved by all kinds of finance working together, and the private sector must be at the forefront.”

Surprise! Your stock loss is not deductible.

You may be considering booking stock losses due to recent market drops. Selling losers can be a great strategy when these losses can offset other gains and up to $3,000 of your ordinary income. However, there is a little-known rule called the wash sale rule that could surprise the unwary taxpayer.

Wash sales explained

If the wash sale rule applies to your transaction, you cannot immediately report a loss you take when selling a security. Per the IRS:

A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

• Buy substantially identical stock or securities,
• Acquire substantially identical stock or securities in a fully taxable trade,
• Acquire a contract or option to buy substantially identical stock or securities, or
• Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.

Why the rule?

Many investors were selling stock they liked simply to book the loss for tax reasons. They then turned around and immediately re-purchased shares of the same company or mutual fund. If done repeatedly, shareholders could constantly be booking short-term losses on a desired company while still owning the shares in a chosen company’s stock indefinitely. Clever shareholders would even purchase the replacement shares prior to selling other shares in the same company to book the loss.

Some ideas

How does one take action to ensure the wash sales rule works to your advantage?

Check the dates. If you decide to sell a stock to book a loss this year, make sure you haven’t inadvertently acquired the same company’s shares 30 days prior to or after the sale date.

Dividend reinvestment. If you automatically re-invest dividends, you will want to make sure this doesn’t inadvertently trigger the wash sales rule.

It’s only for losses. Remember, the wash sales rule only applies to investments sold at a loss. If you are selling stock to capture gains, the rule does not apply.

Consider similar transactions. The wash sales rule applies to buying and selling ownership in the same company or mutual fund. With the exception of some common versus preferred stock of the same company, buying and selling similar – but not identical – shares does not apply to the wash sales rule.

If your loss is ever disallowed because of the wash sales rule, you can add the disallowed loss on to the cost of the new security. When the security is eventually sold in the future, the previously-forfeited loss will be part of the calculation of future gain or loss. This also includes the original stock’s holding period to help define the transaction as a short-term or long-term sale.

Originally Published: July 15, 2024 at 10:41 p.m.

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