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HK regulators launch inquiry into sudden HSBC drop

 Sandy Flockhart, right, chief executive officer of HSBC Holding PLC, Asia Pacific operations leaves a press conference in Hong Kong Tuesday, March 10...
 A worker of HSBC Holding PLC cleans the lion statue in front of the bank after a press conference in Hong Kong Tuesday, March 10, 2009. HSBC Holdings...

Hong Kong HSBC

Sandy Flockhart, right, chief executive officer of HSBC Holding PLC, Asia Pacific operations leaves a press conference in Hong Kong Tuesday, March 10...

Hong Kong HSBC

A worker of HSBC Holding PLC cleans the lion statue in front of the bank after a press conference in Hong Kong Tuesday, March 10, 2009. HSBC Holdings...

HSBC Holdings PLC sought to reassure nervous investors Tuesday after shares of the struggling banking giant plummeted to their lowest point in nearly 14 years amid fears about its plans to raise fresh capital.
The sudden drop that left HSBC's stock down 24 percent Monday has triggered an inquiry by the local securities watchdog and shaken the former British territory, where the bank has deep roots and has long been seen as a blue-chip investment by generations of retail buyers.
"This banking is making money, and it's making money for shareholders," Sandy Flockhart, chief executive officer of the bank's Asia Pacific operations, said at HSBC headquarters in Hong Kong. "We will come through this storm."
Monday's tumble came amid widespread jitters over HSBC's prospects amid the global economic crisis after the lender, Europe's largest, announced last week plans to issue shares to shore up its capital position.
The stock fell 24.1 percent at HK$33 _ its lowest close since 1995. Shares rebounded 13.9 percent to 37.6 Hong Kong dollars Tuesday.
Hong Kong's Securities and Futures Commission said it was looking into transactions during Monday's 10-minute post-trading auction.
"The SFC is aware of the movement of HSBC share prices during the closing auction yesterday. We are now making inquiries," said a SFC spokesman who declined to be identified, citing internal policy.
Hong Kong's financial secretary John Tsang said the government is concerned about HSBC's sharp losses and that he had already met with SFC officials to discuss the issue.
"I know many Hong Kong people are holding HSBC shares and they are very concerned about the ups and downs of the prices," Tsang told reporters Tuesday. "SFC is going to look into it and follow up the issue."
The bank, which trades in London and Hong Kong, has gone into a tailspin since announcing last week that it would raise $17.7 billion through a rights issue meant to shore up the company's capital position without resorting to government handouts.
In Hong Kong, shareholders will be offered five new ordinary shares for every 12 existing shares at a price of HK$28 per new share.


Updated : 2021-05-09 22:45 GMT+08:00