A cloud continues to hang over the future of Hongkong Chinese Bank Holdings, as its share price ended the week at a 33.9 per cent discount to the proceeds due to the group from selling its bank.
The group's shares closed yesterday at HK$2.05, up 2.5 HK cents on the day but discounting one-third of the HK$3.10 proceeds per share expected once the sale of its wholly owned Hongkong Chinese Bank (HKCB) to Citic Ka Wah Bank is completed.
It also valued the rump of the business left behind after the sale - consisting mainly of a small stockbroking operation - at zero, said analysts.
'The market is signalling its deep concern over the future of the group after the sale of HKCB,' said Indosuez W.I. Carr analyst Ines Huang.
Minority shareholders appeared to be crying 'foul' over the deal, said Salomon Smith Barney analyst Michael Siu.
The disposal of HKCB was complicated by a back-to-back deal between major shareholders in the listed holding company, Lippo and China Resources Enterprise (CRE), which would see Lippo buy out its former partner at HK$3.80 a share to take a 64.6 per cent stake in the holding company, he said.
The problem, said analysts, was that not much remained to be held after the disposal, since the small stockbroking business that remained was expected to contribute less than 7 per cent of group profits for this year.