HSBC rights issues deemed roaring success

06-04-2009

HSBC rights issues deemed roaring success
All but 3.4 per cent of HSBC's new shares have been bought by investors after the bank's £12.5 billion rights issue.

HSBC shares rose 5.1 per cent in early trading on the move, while the bank's chairman said it would strengthen capital reserves.

Mr Green said: "This underlines our determination that HSBC should maintain its signature financial strength which has served us so well over HSBC's long history.

"We remain confident that HSBC is well-placed in today’s environment and that our strength leads to opportunity."

Shares not snapped up by investors are due to be sold later today.

Commenting, Philip Gillett, sales trader at IG Index, said the demand was not only a good indicator for HSBC, but also for confidence in the City.

"Given the current market conditions, [the rights issue] is very good. They needed to shore up their balance sheet, and hopefully this will help HSBC to return to business as usual," he said.

The banking sector has seen an upturn in confidence over the last few weeks, and the success of the rights issue has further boosted sentiment, Mr Gillett added.

"It's definitely helped," he said.

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