Speculation is rife on Wall Street that big US investment bank Bear Stearns is a takeover target after it received emergency funding on Friday - and HSBC is among the institutions being touted as potential white knights. However, analysts in Hong Kong yesterday cast doubt on reports the British bank might absorb Bear Stearns. HSBC Holdings, the biggest European bank by market capital, had the resources to make an acquisition, The Wall Street Journal reported. The newspaper also identified private equity firms such as J.C. Flowers as possible buyers of the 85-year-old bank, the second biggest US underwriter of mortgages last year. Fellow US bank JPMorgan Chase is seen as the most likely buyer, though, having, along with the New York Federal Reserve, injected funds in response to Bear Stearns' report that its cash position had 'significantly deteriorated'. Analysts in Hong Kong cited HSBC's exposure to the subprime-mortgage crisis in the US, and the losses it had sustained as a result, as grounds for scepticism that it would bail out Bear Stearns. Two weeks ago, HSBC announced a US$17.24 billion write-down on the value of its assets. 'I am quite sceptical on this,' said KGI Securities associate director Ben Kwong Man-bun. 'After its results came out, the bank said it would like to focus on emerging markets.' Announcing the results on March 3, HSBC chief executive Michael Geoghegan emphasised the bank's focus on Asia and emerging markets after the subprime setback. A week after Mr Geoghegan's speech, HSBC was said to be one of three banks in the running to acquire Singapore government-backed Temasek Holdings' stake in Bank International Indonesia, valued at more than US$800 million. Some analysts were asking where a buyer would get the money to buy Bear Stearns, and what the bank was worth. Its market value fell 45 per cent on Friday, to US$3.64 billion. Stephen Leung, a director of brokerage UOB Kay Hian, said HSBC would have to issue new shares to fund such an acquisition, given that the credit-market crunch triggered by the plunge in value of subprime-backed assets had made other sources of funding hard to find. Despite the latest bad news from the US financial sector, Hong Kong Financial Services Secretary Chan Ka-keung said the city's economic fundamentals were sound, and that the government saw the credit crisis as still confined to the US.