- HSBC posted its biggest one-day jump in 11 years after China’s Ping An Insurance, its largest shareholder, boosted its stake to 8% in the British bank.
- The Chinese insurer bought 10.8 million shares in HSBC at an average price of HKD 28.29 ($4.04) through its investment arm, Ping An Asset Management.
- HSBC’s shares have tumbled to a 25-year-low this year, and fell more than 9% last week.
- The bank, which is based in London but makes much of its money from Asia, has been caught up in a swirl of geopolitical tensions between the US, UK, and China.
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Shares in HSBC jumped as much as 10% on Monday after its biggest shareholder, China’s Ping An Insurance Group, said it had bought additional shares in the London-listed bank, expanding its stake to 8%.
In a filing to the Hong Kong stock exchange on Friday, Ping An disclosed it had raised its stake to 8% from 7.95% and bought 10.8 million shares at an average price of HKD 28.29 ($3.65) each through its investment management arm.
HSBC’s FTSE 100-listed shares rose to 308 pence ($3.91) on Monday, soaring more than 10% in their biggest one-day rise since 2009 after Ping An’s filing. The bank’s Hong-Kong listed shares rose to as high as HKD 31.30 ($4.04) on Monday, and closed 9.2% higher on the country’s benchmark Hang Seng exchange.
The UK bank’s shares fell more than 9% last week following a report that it was one among several European Banks to have facilitated the movement of criminal money even after getting caught.
HSBC, which is based in London but makes much of its money from Asia, has been caught up in intertwining geopolitical tensions between the US, UK, and China.
Shares were also hurt on speculation that its push into China might be hampered. China’s Global Times, a daily newspaper run by the ruling Communist Party, said HSBC could be put under the country’s “unreliable entity” list – aimed at foreign companies that jeopardize national sovereignty, security, and developmental interests.
The reason behind its inclusion into the list involves HSBC’s collaboration with the US to frame Chinese technology conglomerate Huawei, Global Times said. HSBC has denied that it had any part to play in the US Department of Justice’s investigation of the Chinese tech giant.
However, Ping An’s share purchases were most likely linked to financial rather than political considerations, an HSBC insider told the Financial Times.
“Ping An needs cash flow to meet its customer commitments. If you believe the HSBC dividend will be resumed next year then the shares look attractive at these levels,” a person familiar with the matter told the FT.
HSBC declined to comment on the stake increase in an email to Business Insider.