Chong Hing rises on new outside bank chief
Shares in family-controlled Chong Hing Bank advanced the most since July 2010 yesterday as the appointment of a chief executive from outside the family spurred buying on speculation that it would be sold.
Liu Lit-chi, 73, will step down as chief executive, a position he has held since April 2002.
The small local lender controlled by the Liu family, appointed Lau Wai-man as chief executive of the bank - the first time that the post has gone to someone from outside the family.
Shares rose 11 per cent to HK$15.2, on a day the Hang Seng Index inched up 0.99 per cent.
"There is no clear succession plan in Chong Hing as the first generation approaches retirement age," said a trader with a major local brokerage who did not want to be named.
"The family is just seeking stable returns, going by their conservative business strategy. It wouldn't be a surprise if they considered a stake sale if the offer is attractive enough."
Citic Securities International analyst Steven Chan, who upgraded the stock to "buy" after the announcement, said the bank's weak fundamentals might trigger a sale.