Stanchart falls in London as offer triggers switching play

The new share offer launched to back Standard Chartered's Hong Kong listing triggered a 'switching' play by investors when trading in the bank's stock began on the London market yesterday.

'Investors who can buy into the Hong Kong listing were likely to have been taking profits in London with a view to putting some money into the local offer,' Fox-Pitt, Kelton's Hong Kong-based analyst Sunil Garg said.

The strategy of selling in London to reinvest later in the new Hong Kong share offer saw a wave of sell orders take the Standard Chartered share price down 20 pence, or 2.7 per cent, from Friday's close to 734 pence (HK$88.45) within an hour of trade opening.

The retreat came as rival bank stocks all made modest gains.

By the close yesterday, the share had recovered to 744 pence, down 1.32 per cent.

The response from investors was to be expected, analysts said, since the share had made strong gains last week, rising 13 per cent to the Friday close of 754 pence.

The challenge posed to the Hong Kong issue if such a strategy were pursued aggressively, warned analysts, was that London-based investors might buy shares intended to be registered in Hong Kong and repatriate them to the London register - cutting the volume in Hong Kong.