00011 Overview

Privatization Approval: HSBC Holdings and Hang Seng Bank announced that the High Court sanctioned the privatization plan of Hang Seng Bank without modifications on January 23, 2026.

Capital Reduction Confirmation: The High Court also confirmed the Capital Reduction during the same hearing, with official documentation registered on January 26, 2026.

Stock Listing Withdrawal: Following approval from the Hong Kong Stock Exchange, Hang Seng Bank shares will be withdrawn from listing at 4:00 p.m. on January 27, 2026.

Market Activity: As of January 26, 2026, HSBC Holdings experienced a short selling of $236.42 million, with a ratio of 16.012%.

Privatization Approval: HSBC and Hang Seng Bank's privatization scheme has been approved by Hong Kong's High Court, confirming the reduction of issued share capital.

Effective Date: The scheme is set to become binding and effective on January 26, with further announcements to follow once it is finalized.

Listing Withdrawal: The Hong Kong Stock Exchange has approved the withdrawal of Hang Seng Bank shares, effective from 4:00 pm on January 27, contingent on the scheme's effectiveness.

Market Activity: Short selling for HSBC is reported at $223.99 million with a ratio of 15.038%, indicating significant market activity surrounding the stocks.

Top Inflows: Guosen Securities reported the top ten Hong Kong stocks with the largest foreign capital inflows in 4Q25, led by INNOVENT BIO with an inflow of HKD6.43 billion.

Top Outflows: The report also highlighted the top ten stocks with the largest foreign capital outflows, with XIAOMI-W experiencing the highest outflow of HKD50.41 billion.

Short Selling Data: The report included short selling data for each stock, indicating significant short selling activity, particularly for XIAOMI-W and HSBC HOLDINGS.

Market Trends: The report reflects ongoing trends in the Hong Kong stock market, with notable shifts in foreign investment and short selling strategies among major companies.

CICC Report on HSI Adjustments: CICC predicts potential blue chip stocks for inclusion in the HSI based on semi-annual adjustments and quantitative criteria, highlighting companies like ZIJIN GOLD INTL and YUM CHINA.

Short Selling and Inflows: The report details short selling ratios and inflows for various stocks, indicating market activity and investor sentiment towards companies such as BEONE MEDICINES and XPENG-W.

Potential Replacements for HANG SENG BANK: Following the delisting of HANG SENG BANK, companies like STANCHART and SWIREPROPERTIES are identified as potential candidates to fill the vacancy.

Market Performance Overview: The report includes a snapshot of stock performance, with some companies experiencing gains while others face declines, reflecting the mixed market conditions.

Annual Review Announcement: The Hang Seng Indexes Company will announce the results of its annual review of major Hong Kong stock indices on February 13, which will impact the eligible stocks for Southbound Stock Connect.

Potential New Additions: CICC forecasts that ZIJIN GOLD INTL, YUM CHINA, and BEONE MEDICINES are likely to meet the inclusion criteria for the Hang Seng Index, while several other companies may fill the gap left by HANG SENG BANK's removal.

Market Capitalization Considerations: Companies like STANCHART, SWIREPROPERTIES, and SINO LAND are also potential candidates for inclusion based on market capitalization and industry coverage, though their inclusion remains uncertain.

Southbound Stock Connect Adjustments: CICC anticipates that 44 stocks, including JD INDUSTRIALS and CHUANGXIN IND, will become eligible for inclusion in Southbound Stock Connect, while 25 stocks may be removed from the list.

Privatization of Hang Seng Bank: Shareholders have approved the privatization of Hang Seng Bank, leading to its delisting on January 27, which aligns with JPMorgan's expectations despite the earlier completion date.

Positive Outlook for HSBC Holdings: JPMorgan views the privatization as beneficial for HSBC Holdings, allowing for better management guidance on synergies and an improvement in its CET1 ratio.

Market Predictions: Citi has raised HSBC Holdings' target price to $138.3, forecasting a return on tangible equity (RoTE) of 19-20% for 2027-28.

Constructive View on Hong Kong Banking: JPMorgan maintains a positive outlook on the Hong Kong banking sector, highlighting HSBC Holdings and Standard Chartered as top picks due to a strong stock market and recovering real estate market.