HSBC shares soar after China’s Ping An increases its stake

HSBC’s Hong Kong-listed stock rose more than 8 per cent on Monday after its largest shareholder, China’s Ping An Asset Management, increased its stake despite rising tensions between Washington and Beijing.

Ping An revealed in an exchange filing late on Friday that it had raised its holding in HSBC to 8 per cent, up from 7.95 per cent.

HSBC’s shares rose as much as 8.5 per cent to HK$30.60 when trade opened on Monday following the deal, in which Ping An bought 10.8m shares at an average of HK$28.29 each.

HSBC shares lost nearly 9 per cent last week to hit a 25-year low on renewed concerns over the bank’s vulnerability to fallout from deteriorating US-China relations.

The state-run newspaper the Global Times reported last week that HSBC was a candidate for inclusion in Beijing’s “unreliable entities” list of companies that had allegedly harmed China’s interests. Such a move would threaten the bank’s profitable China business.

HSBC has become a target for state media attacks because of its role in the US government’s case against Meng Wanzhou, Huawei’s chief financial officer. Washington is trying to extradite her from Canada over alleged sanctions violations. Ms Meng has denied the allegations.

HSBC has also faced attacks from shareholders in Hong Kong after it announced this year it would suspend its dividend payment.

Kingston Securities’ Dickie Wong said he was bearish on HSBC’s outlook because of the geopolitical tensions affecting the company and its dividend suspension.

“After the recent slump of its shares and also the news of Ping An Asset Management, it’s just simply bounced back a little bit, but nothing more than a technical rebound,” he told the Financial Times.

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Mr Wong said he did not expect Ping An to gain seats on the bank’s board but the Global Times said the increased stake could help HSBC improve its relationship with the mainland.

On Monday, the newspaper also suggested the bank “get rid of senior executives who trapped Huawei and those remaining who are unfriendly toward the Chinese mainland”.

Ping An surpassed BlackRock to become the largest shareholder in the bank in 2018 with a holding then of about 7 per cent.

Shares in Ping An were flat on Monday. HSBC’s dividend had previously allowed Ping An to enjoy a positive carry on its annuity products.

But the Chinese insurer has come under pressure from shareholders to produce greater returns as central banks have slashed interest rates in response to the coronavirus pandemic.

HSBC declined to comment. Asked for the reason behind the move, a spokesman for Ping An said: “This is a long-term financial investment.”



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