HSBC to cash in its Ping An stake
Improving sentiment in Hong Kong is making it more attractive for Europe's investors to replenish capital
HSBC Holdings is planning to sell its entire stake in Ping An Insurance as Europe's largest lender by assets tries to take advantage of improving market conditions in Hong Kong, market participants said yesterday.
The London-based lender's 15.6 per cent holding in Ping An was worth about US$9.5 billion before yesterday's market open. Local media have earlier reported HSBC's intention to sell its stake in China's second-largest insurer by premiums.
"HSBC's selling of the H shares of Ping An reflects mounting pressure among European lenders who must hold more core capital as a buffer against insolvency," said a Hong Kong fund manager who declined to be named.
He added that many European banks have a ways to go to achieve the more stringent capital and liquidity requirements under Basel III starting next year.
Meanwhile, an equity trader at a European investment bank said that sentiment in the Hong Kong equity market has improved because there is optimism that the US fiscal cliff problem will be resolved.
The trading environment in Asia has improved but the choppiness is likely to stay for the rest of the year, the trader said.
Shares in Ping An closed down 2 per cent to HK$58.45 after dropping as much as 3.5 per cent. HSBC rose 1 per cent to HK$74.65 each and the Hang Seng Index edged up 0.49 per cent to 21,262.06 points yesterday.