HSBC plunges over 24 percent to near 14-year low
Struggling British bank HSBC Holdings PLC plunged over 24 percent to its worst finish in nearly 14 years in Hong Kong Monday, as investors dumped the stock ahead of its offering of new shares to raise billions in fresh capital.
Shares of Europe's biggest lender fell 24.1 percent to close at 33 Hong Kong dollars, its lowest close since August 1995, according to analysts.
HSBC, 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.
The stock, down sharply throughout the session, tumbled further near the close of trading as an institutional investor sought to unload nearly 12 million shares, said Peter Lai, investment manager at DBS Vickers.
The day's losses also reflect broader skepticism about the bank's prospects amid the worst global downturn in decades.
"People are pessimistic about outlook about HSBC. The U.S. banking sector is in big trouble and HSBC is deeply involved in the U.S. market," Lai said.
The bank dragged down the market's Hang Seng Index, which fell 4.8 percent.