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Toh Han Shih

The Hong Kong share price of HSBC soared to its highest level for 2015 at HK$77.80 by 11 am on Monday after news that the bank may possibly relocate its headquarters from London to Hong Kong and spin off its UK retail business for 20 billion pounds.
HSBC’s share price at 11 AM Monday was 5.4 per cent higher than its closing price last Friday and 9.9 per cent higher than last Thursday.
HSBC was the most heavily traded Hong Kong stock on Monday morning, with a turnover of nearly HK$6 billion by 11.25 am. From the opening of the market till 11 am Monday, 72.31 million HSBC shares changed hands in the heaviest trading in the stock since 2011.
Analysts said the rally in HSBC may have some legs to it.
“HSBC was a laggard. There will be a catch up play for HSBC,” said Steven Chan, an analyst with Maybank Kim Eng.
The twin reasons for the share price surge on Monday morning are reports that HSBC may spin off its UK retail business and may relocate its headquarters from London to Hong Kong, Chan said.
HSBC’s possible relocation of its headquarters from London to Hong Kong is a positive development if it happens, the Hong Kong Monetary Authority said on Friday.
At HSBC’s annual general meeting in London last Thursday, bank chairman Douglas Flint said HSBC may possibly “start exploring” relocating its headquarters from London to an undisclosed location, but did not give any time frame.
HSBC, which has been headquartered in London since 1993, paid US$1.1 billion in a levy to UK authorities last year. HSBC has been under scrutiny by the British authorities over the activities of its Swiss private banking unit, which is suspected of helping clients evade taxes.
In addition, HSBC, which is also Europe’s biggest bank, is weighing plans to spin off its British retail bank in a 20 billion pound deal, the Sunday Times reported quoting unnamed sources. HSBC declined to comment on the report. Although the market may view the possible spin-off favourably, Chan was sceptical that this would be a good move if it materialised.
The UK accounts for one-third of HSBC’s global business, and retail banking is the main business of HSBC’s UK operations, Chan said.
“Why should HSBC be so stupid to sell the business at such a low price?” he asked.


HSBC shares soar in Hong Kong on report may move out of London

The HSBC logo gleams as its shares jumped on Monday after reports it may consider moving its headquarters out of London. Photo: EPA

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