What happened
On September 21, HSBC’s stock closed with a 5 percent plunge in Hong Kong, bringing prices to their lowest levels since 1995, according to the data provider Refinitiv. The pain extended to London, where the bank's shares were last down by 6 percent — another multi-decade low. It had already been a miserable year for HSBC's shareholders, with the bank suffering from a global recession, plunging profits, US-China tensions, and political unrest in Hong Kong. But then, HSBC got slapped with even more bad news: Chinese state media suggested that it might be included on a list of companies that could soon face business restrictions in China.
Jing Take:#
The London-based lender traces its roots to Hong Kong and has carved out a lucrative role in global banking for decades by straddling East and West. Asia delivered more than 80 percent of HSBC's profits last year. However, as tensions between Beijing and the West escalate, the company is feeling insecurity from the investors. On September 19, the Commerce Ministry of China laid out how the long-rumored blacklist would work. Any business placed on the so-called "unreliable entity list" could be restricted from investing in China, participating in Chinese imports or exports, or having its staff enter the country, said the ministry in a statement. The ministry did not provide the detailed names on that list or a timetable for its release. But HSBC's possible inclusion was mentioned by the Chinese state-run media Global Times. That news only heightened the stress surrounding HSBC’s already uncertain future.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.