HSBC Share Price Up as Bank Breaks into Asian M&A Top Tier

on Jun 28, 2013
Updated: Feb 27, 2024
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iNVEZZ.com, Friday, June 28th: HSBC Holdings Plc (LON:HSBA, HKG:0005) has landed in the top five for Asian M&A advisory for the first time. The bank has beaten rivals such as Goldman Sachs in a difficult climate with global market volatility depressing corporate acquisitions. HSBC’s share price closed nearly one percent higher in Hong Kong on Friday, and was also marginally up in intraday trading on the London Stock Exchange.

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**HSBC Moves up the Asian M&A Ranks**
According to preliminary data from Thomson Reuters HSBC has advanced to the number three M&A advisory position in Asia Pacific, excluding Japan, up from number nine a year ago. The position is the best ranking the bank has secured in the region.

Reuters reported that the number one slot in the Asia-Pacific ex-Japan league table was occupied by Morgan Stanley working on $33.1 billion (£21.7 billion) worth of deals, whereas Switzerland’s UBS AG was ranked as number two, advising on deals worth $25.9 (£17 billion). HSBC secured the number three position with $21.9 billion (£14.4 billion), leaving Goldman Sachs Group Inc, which has been Asia Pacific top M&A adviser for past two years, at the number four spot.

As Reuters noted, HSBC managed to enter the top five tier “in a dismal deal climate”, with M&A volumes in the region down nearly nine percent to $216 billion (£141.7 billion). Last month the newswire quoted investment bankers as commenting that company boards and CEOs had generally been cautious about making big M&A bets due to the uncertain economic environment in China, and the world’s other major markets.

**HSBC Model**
Investment banks traditionally prefer to be on the seller’s side in M&A transactions, since that would guarantee that their client will participate and pay a fee, Reuters noted. By contrast, banks advising buyers risk their clients losing to rival bidders which could result in either reduction or loss of fee. HSBC however is operating on a different model, chasing buyside mandates because of the opportunity its broader commercial banking platform provides to offer ancillary products to clients in an acquisition, such

as loans and derivatives.
George Davidson, HSBC’s head of M&A for Asia-Pacific, commenting that while the bank had also done sellside mandates, “that work is very intensive and you only tend to get the advisory fee, whereas with a buyside mandate you can provide the full package of hedging, financing and capital markets takeout”.
**HSBC to Sell Mutual Funds in China**
!m[HSBC Entering Top Five in “Dismal Deal Climate”](/uploads/story/3511/thumbs/pic1_inline.jpeg)
On Wednesday, Bloomberg reported that HSBC had received an approval from the China Securities Regulatory Commission and would start selling domestic mutual funds soon, expanding its scope of financial services in the local market.
In February the regulator allowed insurers and brokerages to sell mutual funds to the public as the government seeks to increase the role of institutional investors and attract more money into China’s capital markets.
**HSBC’s share price was 0.38 percent up at 685.30p in London as of 12:46 BST on 28 June 2013. In Hong Kong, HSBC’s share price closed 0.99 percent higher at HK$81.30.**
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