Hong Kong’s securities regulators have launched an inquiry into the sudden drop in HSBC shares on Monday that sent the stock price of the struggling bank down 24 percent, its lowest finish in nearly 14 years, while the bank sought to reassure nervous investors yesterday.
Shares of Europe’s biggest lender rebounded 13.9 percent to HK$37.6 yesterday.
The stock tumbled sharply on Monday in late trading and in after-hours trading on jitters over HSBC’s plan to sell new shares, shaking the territory, where the bank has deep roots and has long been seen as a bluechip investment by generations of retail buyers.
PHOTO: AFP
The stock fell 24.1 percent at HK$33 — its lowest close since August 1995.
The Securities and Futures Commission (SFC) said it is looking into the transactions of HSBC shares during Monday’s 10-minute post-trading auction.
“The SFC is aware of the movement of HSBC share prices during the closing auction yesterday. We are now making inquiries,” said a SFC spokesman who declined to be identified, citing internal policy.
Financial Secretary John Tsang (曾俊華) also said the government is concerned about HSBC’s sharp losses and that he had already met with SFC officials to discuss the issue.
“I know many Hong Kong people are holding HSBC shares and they are very concerned about the ups and downs of the prices,” Tsang told reporters yesterday. “SFC is going to look into it and follow up the issue.”
The big drop also stoked concerns about the bank’s prospects amid the worst global downturn in decades.
HSBC Holdings PLC, which trades in London and Hong Kong, has gone into a tailspin since announcing last week that it would raise US$17.7 billion through a rights issue meant to shore up the company’s capital position without resorting to government handouts.
In Hong Kong, shareholders will be offered five new ordinary shares for every 12 existing shares at a price of HK$28 per new share.
Last week, the bank announced a worse-than-expected 70 percent drop in annual net profit and said the rights issue was needed for future investments — not to shore up its balance sheet.
It said the poor results were mainly due to the dire performance of its US unit, where it has written off a huge chunk of its debt.
Ratings agency Moody’s on Monday downgraded the outlook on HSBC’s debt to “negative” from “stable.”
However, Sandy Flockhart, chief executive officer of the bank’s Asia- Pacific operations, defended HSBC yesterday.
“This banking is making money, and it’s making money for shareholders,” he said. “We will come through this storm.”
Meanwhile, a veteran stock commentator burst into tears during a live TV broadcast as she saw HSBC’s shares plunge dramatically seconds before the end of Monday’s trading.
Agnes Wu’s (胡孟青) comments on the recent volatility of HSBC’s shares trailed off as she saw its price slump to HK$33 Hong Kong after a last-minute sell order, a clip on Cable News showed.
Wu and the anchor of the show were both wide-eyed and they shouted out the closing price in surprise. She was unable to continue talking and shook her head for a few seconds.
The normally tough commentator then started to sob and said: “It’s a heart-wrecking fall.” She then wiped her right eye, but remained silent until the live show ended.
Wu later told the Standard newspaper she does not hold shares in HSBC. She explained she could not help bursting into tears because she felt it was unfair for big players to bully small investors.
She told the newspaper that HSBC’s share plunge was the result of short-sellers who wanted to drive down the price and snap up shares after the bank completes the rights issue.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS