HSBC shares post biggest intraday rise in a decade after biggest shareholder Ping An increases stake in lender

HSBC’s shares rose nearly 11 per cent in Monday’s afternoon session in Hong Kong, its biggest intraday increase since 2009
Ping An’s asset management arm bought 10.8 million shares last week, increasing its stake to 8 per cent

HSBC

Chad Bray

Published: 2:02pm, 28 Sep 2020

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HSBC’s shares had their biggest intraday jump in Hong Kong in more than a decade on Monday as its largest shareholder increased its stake after the bank’s share price fell to a 25-year low last week.

The bank’s stock rose nearly 11 per cent in Monday’s afternoon session, its largest intraday increase since 2009. Its shares finished the day 9.2 per cent higher at HK$30.80 (US$3.97).

In a stock exchange filing on Friday, Ping An Insurance Group said its asset management arm bought 10.8 million HSBC shares last week, raising its stake in the bank to 8 per cent from 7.95 per cent.

On Sunday, a Ping An spokesman said the insurer views HSBC as a “long-term investment”, but did not provide any additional comment on why its asset management arm bought shares at this time. The Shenzhen-based insurer has been a major stakeholder in HSBC since 2017.

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HSBC doubles down on Asia in massive staffing overhaul

The biggest of Hong Kong’s currency issuing banks, HSBC fell to a 25-year low last week as its shares declined 8.9 per cent after media reports said it and other banks processed trillions of dollars in money transfers despite concerns about potential criminal activity, and the Chinese nationalistic tabloid Global Times said HSBC could be included in Beijing’s newly created “unreliable entities” list.

Before Monday’s share price jump, HSBC lost US$84 billion in market capitalisation this year on concerns about rising tensions between the United States and China, a weaker operating environment and the elimination of its dividend at the request of its chief regulator in the United Kingdom.

Banks are generally trading lower this year as the coronavirus pandemic weakened economies from Hong Kong to New York, but HSBC’s performance had been much worse than its global peers.

One major concern for some investors is the worsening relationship between Washington and Beijing and how that could affect the 155-year-old bank’s business, which relies heavily on the flow of capital between Asia and other parts of the world.

In the past two years, HSBC has been at the centre of a variety of flashpoints between the US and China, including an American inquiry into Huawei Technologies and a controversial national security law for Hong Kong.

The US sanctioned several Hong Kong and mainland officials over the national security law and foreign financial institutions who engage in “significant transactions” with individuals deemed to have threatened Hong Kong’s autonomy could face sanctions themselves under the recently passed Hong Kong Autonomy Act.

The rising tensions come as HSBC is making a major bet on future growth in Hong Kong and mainland China as part of its latest revamp under chief executive Noel Quinn. The lender plans to eliminate 35,000 jobs globally in the next three years and reinvest capital from underperforming businesses in Europe and the US to growth markets in Asia.

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