HSBC Holdings (LON:HSBA) is on track to become the first foreign company to trade on a Chinese bourse, the Financial Times has reported. The move will come as a new stock exchange link between London and Shanghai targets the Asia-focused lender as its first offering.
At home, HSBC’s share price has been little changed in today’s session, having given up 0.18 percent to 623.50p as of 10:28 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally higher and currently trading 0.19 percent up at 7,068.02 points. The group’s shares have given up more than 16 percent of their value over the past year, as compared with about a 6.4-percent fall in the Footsie.
HSBC could get China listing
The FT reported earlier today the London-Shanghai stock connect was planning to make HSBC the first offering of Chinese Depositary Receipts (CDRs) — a tradeable security which reflects underlying shares listed elsewhere. Sources with knowledge of the matter told the newspaper that the plan to offer stock in the FTSE 100 lender was viewed as a symbolic listing following years of planning.
The trading link, expected to go live at the end of the year, comes with China looking to open its stock market to international investors in a controlled manner. The FT noted that HSBC had declined to comment on details of the plan, but had noted that it was “studying the proposed framework for the listing of [CDRs] under the Shanghai-London Stock Connect”.
Analysts on Asia-focused bank
UBS, which rates HSBC as a ‘neutral,’ lowered its price target on the stock from 750p to 650p yesterday, while earlier this week, JPMorgan Chase & Co, which is also ‘neutral’ on the FTSE 100 group, trimmed its valuation on the shares from 780p to 750p. According to MarketBeat, the Asia-focused lender currently has a consensus ‘hold’ rating and an average price target of 748.50p.