Banking News
- HSBC raises BoCom stake to 19 percent
Date: 29-Oct-2007 Sources: (Shenzhen Daily)
HSBC Holdings Plc. confirmed Friday that it has lifted its stake in Bank of Communciations (BoCom) to 19 percent from 18.6 percent.
HSBC paid a total of HK$2.16 billion (US$277.99 million) for 172.5 million Bank of Communications shares earlier last week, according to the Hong Kong stock exchange.
An HSBC spokeswoman confirmed that the bank bought the shares Oct. 23 and Oct. 24 at average prices of HK$12.39 and HK$13.03 per share, respectively, on the market.
BoCom chairman Jiang Chaoliang said earlier this month that HSBC wanted to raise its stake in his bank over the next 12 months and would not be deterred by BoCom's rising share price.
Shares of BoCom ended up 0.63 percent in Hong Kong on Friday and have risen nearly 50 percent in the past three months. The bank's Shanghai-listed A shares rose 4.16 percent to close Friday at 16.02 yuan (US$2.14).
In 2005, HSBC bought a 19.9 percent stake in BoCom for US$1.75 billion. This was diluted to 18.6 percent early this year when BoCom floated shares on the Shanghai market.
Under China's current regulations, a single foreign investor can only hold up to a 20 percent stake in a Chinese bank.
BoCom agreed in 2005 that HSBC would have the option to raise its stake to 40 percent between 2008 and 2012, subject to the Chinese Government's approval.
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