Jiang Chaoliang, Chairman of the Bank of Communications (BoCom) <3328.HK> <601328.SS>, told reporters in Beijing on Monday both lenders had agreed HSBC would have the option to raise its stake to as much as 40 percent -- when regulations allowed.
HONG KONG (Reuters) - Shares in HSBC Holdings Plc <0005.HK> <HSBA.L> jumped nearly 4 percent in Hong Kong on Monday after reports the global lender will try to raise its slice of China's fifth-largest lender beyond a legally allowed 20 percent.
Jiang Chaoliang, Chairman of the Bank of Communications (BoCom) <3328.HK> <601328.SS>, told reporters in Beijing on Monday both lenders had agreed HSBC would have the option to raise its stake to as much as 40 percent -- when regulations allowed.
But analysts said investors were reacting to reports that HSBC had already applied to do so, seeking an exemption to Chinese law that caps foreign ownership of a domestic bank at just under 20 percent.
One fund manager in Hong Kong said HSBC extended a rally after a recent stock upgrade from Goldman Sachs.
!ADVERTISEMENT!"Between us, there is no problem. But there is a legal barrier," Jiang told reporters after he was asked whether HSBC and BoCom would try to secure an exemption to ownership rules.
HSBC was trading up 3.2 percent in late afternoon trade. BoCom shares climbed as much as 2.7 percent -- the only major Chinese lender to have gained in Hong Kong in the afternoon.
The market also gathered steam in the afternoon as investors judged Hong Kong oversold, helping accelerate HSBC's run. Its stock was looking attractive trading at around 9 times this year's earnings versus 14 times for its blue-chip peers, according to Reuters Estimates.
(Reporting by Rita Chang; Editing by Anne Marie Roantree)
