HSBC moves closer to Shanghai listing

by Gill Montia

Story link: HSBC moves closer to Shanghai listing

Shares in HSBC Holdings rose over 4% in Hong Kong on Monday, following a report in the Sunday Telegraph that the bank’s chairman, Stephen Green, has been discussing the possibility of an investment in the group by China Investment Corporation (CIC).

It is understood that officials from the sovereign wealth fund have met with Mr Green several times in recent months and may be considering buying HSBC shares on the open market.

However, the recent surge in the share price could also be connected to better than expected first-half results from US financial institutions, including Citigroup and JP Morgan Chase.

HSBC has weathered the credit crisis well, and unlike some of its UK competitors is not in urgent need of capital. However, an investment by CIC would fit with the group’s strategy of broadening its shareholder base in its important growth markets.

In addition, it is well known that HSBC is keen to become the first foreign business to achieve a listing on the Shanghai stock market.

In January of this year, the group declared that it will seek a listing as soon as the Chinese authorities lift restrictions on the presence of foreign companies.

Chairman Stephen Green has stated that there is no country that he regards as strategically more important to the group than China.