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From schools to funds to groups, the offer captures HK's attention

Hundreds of government bodies, statutory organisations and community institutions are considering HSBC's new rights offer, along with small investors and fund managers.

Organisations - such as tertiary institutions, secondary schools, business chambers, professional bodies - as well as individual funds like teachers' provident funds, are holding HSBC stocks and will be affected by the bank's announcement yesterday.

Philip Lam Bing-lun, finance director in the University of Hong Kong, said the university's investment committee would need to convene shortly to consider the new rights offer. Billy Tam Hung-bin, senior finance manager of Chinese University, said the university would also consider the offer.

Li Lok-yin, principal of Queen's College, acknowledged that some donations from alumni and other benefactors were already invested in HSBC shares. The purpose was to generate income for use as scholarship awards.

The school's governors would decide whether or not to take up new shares. 'The main consideration is that our capital would not be affected. We would only use the income that had been generated to meet the cost of new shares,' he said.

Even trade associations, like the Chinese Manufacturers' Association of Hong Kong, hold HSBC stocks. A spokeswoman for the association said the decision whether to take up HSBC's new offer would be made by its investment committee, which would meet shortly to work out the strategy.

The rights issue could have a more lasting impact on teachers, as part of their provident funds are held in HSBC stocks. The Education Bureau is centrally managing two schemes for teachers - the Grant School Provident Fund and Subsidised Schools Provident Fund.

Kwok Man-leung, principal of Buddhist Yip Kei Nam Memorial College, and a member of the management committee for the two funds, said there should be sufficient cash to meet the rights offer if it was decided to purchase. 'As of last August, the [two funds'] investment in HSBC stocks was about HK$1.2 billion, whereas the total portfolio is valued at more than HK$50 billion,' he said.

A spokeswoman for the Education Bureau said, 'The provident fund management committee will consider carefully the [HSBC] rights issue offer, and will take the advice of the investment committee and in accordance with the approved investment framework.'

Even part of the government's fiscal reserves is held in various funds managed under the Exchange Fund. The Monetary Authority did not comment on whether the Exchange Fund would subscribe to the offer.

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