The story appears on

Page B2

August 5, 2009

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Finance

HSBC seeks mainland listing to raise US$7.3b

HSBC Holdings could raise 50 billion yuan (US$7.3 billion) in a Shanghai listing next year as it vies to be one of the first foreign firms to list on China's mainland, said people familiar with the matter.

HSBC, which reported a better-than-expected US$5 billion half-year profit on Monday, said it wants to list but has yet to mandate investment banks for the planned flotation. HSBC said it has not decided the size of the offering while the timing is subject to regulatory approval.

HSBC, the world's biggest bank outside China by market value with a market capitalization of more than US$184 billion, says it sees the Shanghai flotation as a way to accelerate its growth there at a time when international rivals have retreated.

"While the financial impact of an actual listing may be negligible, we believe the branding/advertising/positioning advantages of being one of the first foreign listed banks in China's mainland could be significant, given the size and growth prospects of the mainland's banking and consumer financial services market," Goldman analyst Roy Ramos said in a recent note.

HSBC has good Chinese ties. It was the first foreign bank to raise 1 billion yuan in the yuan-denominated bonds in Hong Kong in June.

Its top three Chinese investments - a 19-percent stake in the Bank of Communications, a 16.8-percent stake in Ping An Insurance and a 12-percent stake in the Industrial Bank - rose in value by US$8 billion in the first half to US$22.5 billion. It only invested US$4.5 billion in the trio.

The Bank of Shanghai, in which HSBC has an 8-percent stake and the country's biggest city commercial bank, has hired Goldman Sachs Gaohua Securities to advise on a 10-billion-yuan initial public offering.

HSBC, the biggest foreign operator in China, said it is on track to increase its branches on the mainland to 100 by the end of this year, from 87 now.

Its mainland business made a US$752-million first-half profit, accounting for 15 percent of the group total.

However, plans for a Shanghai listing would have to negotiate local obstacles.

The government is unlikely to approve HSBC's Shanghai listing ahead of the flotation plans of China Mobile and CNOOC, one source familiar with the matter said. "But once they clear with the regulator, raising 20 to 50 billion yuan in China is easy," the person said.




 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend