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.
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
SOUTH CHINA SEA? The Philippine president spoke of adding more classrooms and power plants, while skipping tensions with China over disputed areas Philippine President Ferdinand Marcos Jr yesterday blasted “useless and crumbling” flood control projects in a state of the nation address that focused on domestic issues after a months-long feud with his vice president. Addressing a joint session of congress after days of rain that left at least 31 dead, Marcos repeated his recent warning that the nation faced a climate change-driven “new normal,” while pledging to investigate publicly funded projects that had failed. “Let’s not pretend, the people know that these projects can breed corruption. Kickbacks ... for the boys,” he said, citing houses that were “swept away” by the floods. “Someone has
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
RSS