HSBC and rights-offer shares claim the top two turnover spots

Shares in HSBC Holdings and its rights offering grabbed the top two spots in turnover on the Hong Kong stock exchange yesterday, accounting for 10 per cent of shares changing hands in a day of hectic trading.

Turnover in HSBC shares was HK$3.22 billion, while trading in the bank's rights came to HK$2.45 billion.

On their trading debut, HSBC rights opened at HK$11 and dropped to as low as HK$10.80 after the first 10 minutes. They then traded heavily throughout the day, rising to a high of HK$13.26 in the last few seconds before closing at HK$13.20, up 20 per cent.

In London, HSBC rights closed 48.18 per cent higher at 163 pence, compared with a closing price of 110 pence on Friday. HSBC shares rose 12.6 per cent to 417.75 pence. In New York, HSBC's American depositary receipts rose 15.1 per cent to US$30.19.

In Hong Kong, there were 50,834 trades in HSBC rights, accounting for about 7.3 per cent of the market's total trades.

HSBC ordinary shares traded at a 1.2 per cent premium over the HSBC rights plus the rights offer price of HK$28 apiece. HSBC opened lower at HK$39.30 but closed 0.6 per cent higher at HK$41.70.

A queue that often numbered more than 100 local HSBC shareholders formed at the Hopewell Centre yesterday as people waited to submit applications for the HSBC rights issue.

The banking giant is raising US$17.7 billion by offering five new shares for every 12 ordinary shares at HK$28 each.

'The rebound of HSBC from the day's low was mainly driven by investors' expectations of good news coming from the latest round of the US rescue plan and its effect on the local banking sector,' said Patrick Yiu Ho-yin, managing director at CASH Asset Management.

'Investors bought [HSBC rights] to try to find some short-term return. If HSBC rises, their rights are set to rise simultaneously.'

Trading in HSBC rights will end next Tuesday.

HSBC's online banking saw a slowdown in processing customers' orders at one point during heavy trading in the bank's rights.

A spokesman for the Hong Kong Monetary Authority expected the payment and settlement system would run smoothly even though the rights issue was under way.