End of an era: Hang Seng Bank to leave Hang Seng Index after 53 years if buyout passes
Brokers say the well-established benchmark is unlikely to be affected, as shareholders are poised to back HSBC’s privatisation plan
Hang Seng Bank will be removed from the Hang Seng Index after the close on January 14 if shareholders approve HSBC’s privatisation plan next week, ending the lender’s blue-chip run that dates back to 1972.
Hang Seng Indexes, the index compiler and a unit of Hang Seng Bank, on Tuesday set out the timetable for changes across the benchmark index and other key gauges triggered by the proposed buyout.
“It is a shame to see Hang Seng Bank removed from the benchmark index named after the bank. It has been one of the darling stocks for retail investors over the past 53 years,” said veteran broker Christopher Cheung Wah-fung, founder and chief executive of Christfund Securities.
“We will soon enter an era of Hang Seng Index without Hang Seng Bank. However, I do not think the privatisation and delisting of Hang Seng Bank will have a big impact on the stock market or the benchmark index,” Cheung said. “HSBC is likely to continue to support Hang Seng Bank and also the index compiler in future.”
HSBC will hold a court meeting and a general meeting of Hang Seng Bank shareholders from 10.30am on January 8 in Hong Kong to vote on its proposed HK$155-per-share offer, a deal valued at about US$14 billion and unveiled on October 9.
Brokers expect the scheme to pass, citing the 30 per cent premium to Hang Seng Bank’s HK$119 closing price on the last trading day before the announcement. If approved, the lender will be delisted after its final trading session on January 14.
