Foreign distressed companies selling Chinese assets.
Some time ago in 2008 I was asked what will happen to China if the CCP government kept selling out Chinas vital economic assets? I replied that ultimately the Chinese people will buy back the Chinese assets that the CCP government sold with its vast savings. I had originally estimated that will happen in at least several years from the time I made the prediction but the rapidly deteriorating economic conditions in the EU and America and Japan are making my prediction to come true even faster that I expected. Now the foreign companies are selling their Chinese assets as quickly as they can to stay afloat.
Below is an article about HSBC which was originally the Hong Kong and Shanghai Bank until it left Hong Kong following the return of Hong Kong back to China in 1997. For many years HSBC is one of the most well run banks in the world. But it seems that the current global economic down turn has caught it as well. So now HSBC is having to think hard about selling its stakes in Chinese companies such as China's Bank of Communications and Ping An Insurance as well as Hong Kongs Hang Seng Bank. So what the CCP government had sold will now be bought back by the Chinese people as I predicted. As always what harm the corrupt Chinese government do must ultimately be redressed by the hard working Chinese people.
This and future economic meltdowns in the West and Japan will present good opportunities for Chinese people not only to buy back Chinese companies sold out by the CCP government but also to buy good quality American and EU and Japanese companies to yield a complement to Chinas global economic reach for the solid benefit of China.
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UPDATE 2-HSBC HK shares slump; fund-raising fears loom
Tue Jan 20, 2009 5:44am EST
(Updates with analyst comments)
By Michael Flaherty and Alison Leung
HONG KONG, Jan 20 (Reuters) - Shares in HSBC Holdings symbol=0005.HK fell as much as 8.8 percent in Hong Kong on Tuesday to their lowest since October 1998, raising the prospect that the company will have to raise a massive amount of capital to offset losses as more loans and mortgages go sour.
The seven-day slide in HSBC's shares has heightened market expectations that Europe's largest lender will have to raise funds via a rights offering or selling its prized stakes in Chinese companies. A growing number of analysts also expect it will cut its dividend to conserve cash.
HSBC has indicated it is sticking with its China investments, but that has not stopped analysts from predicting which stake would be the first to go if the bank chooses to sell out.
HSBC owns 19 percent of China's Bank of Communications, 16.8 percent of Ping An Insurance and 62.1 percent of Hong Kong's Hang Seng Bank.
"HSBC is more likely to sell its stake in Hang Seng Bank (if they really have to) rather than selling their China footprint in Bocomm and or Ping An," a Cazenove Asia note said on Tuesday.
One analyst, who did not want to be identified because he is not allowed to speak publicly to the media, said HSBC would consider selling its Ping An stake first, if it chose to raise capital without a rights offering.
But HSBC's downside is limited, based on Goldman's price target of HK$49 and Morgan Stanley's HK$52, Tang said.
"Investors should start buying, and between HK$50 and HK$57 are good entry points," Tang said. "By the end of the year, it could generate 20-30 percent profit."
(Additional reporting by Tony Munroe)
(Editing by Kim Coghill)
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