Market jitters over HSBC leadership battle
Investors are bracing for volatile trading in HSBC Holdings this week after the global lender on Friday confirmed a succession plan that would reshape its top management.
Rumours swirled around the banking stalwart last week until it finally crowned Douglas Flint as the next group chairman. Skittish investors worried that reports of acrimony surrounding the discussions might signal an internal divide over HSBC's future strategy.
'The whole situation is like a soap opera,' said Ricky Tam Siu-hing, executive director at Champlus Asset Management. 'And so HSBC may be under some [trading] pressure.'
Its Hong Kong-listed shares tumbled 2.4 per cent last week to HK$80.60, dropping in each of the holiday-shortened week's four trading sessions. The Hang Seng Index edged up 0.7 per cent over that span.
'After this fighting, it seems that HSBC is not as [stable] as expected,' Tam said.
But HSBC shares may find near-term support as investors window-dress their funds this week ahead of the start of the fourth quarter.
And Kenny Tang Sing-hing, an executive director at Redford Asset Management, said the succession should not have much bearing. 'HSBC is likely to remain firm,' he said. 'The management [succession plan] has been unclear, but the uncertainty has been cleared up.'
He said there would be buying interest for HSBC stock if it dipped below HK$80. It has closed above that threshold during the past two weeks.
Michael Geoghegan, HSBC's chief executive, spurred on the succession plan for outgoing chairman Stephen Green, according to a company statement. He was reportedly passed over for promotion to the top spot, and will step down from his position at the end of this year and retire from the bank at the beginning of 2011.
Green announced he will step down at the end of this year to become the British trade minister.
