Trading in HSBC shares suspended in Hong Kong

Discussion in 'Stocks' started by bond_trad3r, Mar 2, 2009.

  1. http://www.google.com/hostednews/afp/article/ALeqM5gUbDM44tjgKzAVb-d51P4C2rkdCg

    HSBC to scale back US consumer finance arm: report

    1 hour ago

    HONG KONG (AFP) — HSBC on Monday will announce plans to scale back its US consumer finance operations as it launches a 17 billion US dollar rights issues to boost its capital base, the Financial Times reported.

    The London-based bank, which will release its annual results at 0800 GMT Monday, is expected to say it will further downsize its US-based credit card and mortgage lender, the newspaper cited unnamed sources as saying.

    The US consumer finance arm, HSBC Finance Corporation, has stopped writing new subprime mortgages -- the source of mounting losses for the division -- and closed its car loan business in the United States.

    The newspaper also said HSBC would cut dividends and unveil a 17 billion-US-dollar share offering which is expected to set a record for the biggest rights issues to be funded by private investors.

    The offer is to be underwritten by a consortium of global banks led by Goldman Sachs and JPMorgan Cazenove, it said.

    The bank suspended trading of its Hong Kong-listed shares on Monday, saying it would announce a "corporate action" when it released its annual results. Trading was expected to resume on Tuesday.

    Analysts said the results report from HSBC, one of the first banks to warn about the subprime crisis and one of the few not to beg for government hand-outs, would provide a telling sign of the ferocity of the global slowdown and the state of the beleaguered British banking system.

    Some analysts expected a short-term rebound in its share price after the uncertainties over the rights issue was removed.

    "If HSBC really undertakes a rights issue, it would offer a short-term positive catalyst for the Hang Seng Index since the biggest overhang [to the market] would be removed," Winson Fong, managing director at SG Asset Management (Hong Kong), told the South China Morning Post.

    The fundraising speculation has had a devastating effect on the firm's share price.

    It hit a 10-year low on February 24 in Hong Kong after falling close to 30 percent in the last three months, making it one of the worst performing stocks in the Hang Seng Index.


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    http://www.marketwatch.com/news/story/trading-halted-hsbcs-stock-hong/story.aspx?guid={E11E544D-D871-4D17-A992-4F60B1065ECB}&dist=
     
  2. If HSBC really undertakes a rights issue, it would offer a short-term positive catalyst for the Hang Seng Index since the biggest overhang [to the market] would be removed," Winson Fong, managing director at SG Asset Management (Hong Kong), told the South China Morning Post.
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    This doesn't make sense.

    This is a rights offering only to HK share holders?

    I've never read of a rights offering in their market. This is not going to turn out well for buyers. This is a London/gs dupe (for lack of a better word).