Which stocks will Hang Seng Bank shareholders consider with their US$14 billion windfall?
Investors could favour high-dividend stocks like HSBC and Bank of China as they seek stable returns and growth potential, analysts say
High-dividend yielding Hong Kong and mainland banking stocks are likely to attract investors looking to park some of the HK$106.16 billion (US$13.6 billion) windfall from the Hang Seng Bank privatisation deal, according to analysts.
They tipped Bank of China (Hong Kong) and HSBC to be among the biggest beneficiaries these investors seek as dividend-paying replacements.
About 15,000 Hang Seng Bank shareholders are expected to receive their payout cheques by February 4 in exchange for their shares, after they voted to approve the lender’s privatisation by parent HSBC on Thursday. HSBC offered HK$155 per share to buy out the remaining 37 per cent of Hang Seng Bank it did not own.
Hang Seng shareholder Charles Cheng Kai-ming, who will get HK$1.55 million from the deal, said he planned to reinvest in shares of China Construction Bank (CCB), Bank of Communications and Hong Kong Exchanges and Clearing.
“I invested in Hang Seng for its high-dividend yield,” said Cheng, 79. “I am looking for other companies that have strong assets, good earnings and a high-dividend-payout ratio.”
In 2024, Hang Seng Bank had a dividend yield of 5.7 per cent, compared with 5.2 per cent for both Bank of China (Hong Kong) and Bank of East Asia and 6 per cent for Dah Sing Bank, according to the proposed privatisation document.
“As a replacement for Hang Seng Bank, which was valued for its stable operations and high dividend yield of around 4 per cent to 5 per cent in recent years, its shareholders may consider reallocating proceeds into similar high-dividend-yield stocks or exchange-traded funds (ETFs) listed on the Hong Kong stock exchange,” said Louis Wong, executive director of Phillip Capital Management (Hong Kong).
Wong said mainland lenders such as CCB, Industrial and Commercial Bank of China and Bank of China all had yields of more than 5 per cent.
Among the non-banking high-yield stocks, Wong said China Mobile and CNOOC both had dividend yields of over 6.5 per cent, while PCCW offered 7 per cent.
Some ETFs, which track high-dividend-yield stocks, such as the Global X Hang Seng High Dividend Yield ETF and Ping An of China CSI HK Dividend ETF, yield around 6 per cent, he added.
Tommy Ong, managing director at T.O. & Associates Consultancy, said HSBC was the simplest alternative for Hang Seng shareholders.
“The risk of holding Hang Seng versus HSBC is pretty similar,” Ong said. “HSBC’s business is now very much similar to Hang Seng, but the group has a larger customer base and better risk-management capability.”
Bank of China (Hong Kong) was another option because it serves many retail customers and small and medium-sized enterprises in Hong Kong, and paid a stable dividend, Ong said.
Investing in HSBC could also be beneficial given its high dividend payout and potential share price growth, said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
“After the privatisation, HSBC can account for all of Hang Seng’s profit and income, increasing HSBC’s potential to pay higher dividends,” Tang said. “HSBC’s share price may also continue to rise when Hang Seng’s property debt problems subside and bad debt writedowns reduce.”
Hang Seng Bank shareholders could also consider investment-grade bonds as they usually gave a solid 3 to 4 per cent annual returns, said Ryan Lam Chun-wang, Hong Kong head of research at Shanghai Commercial Bank.
“They could also consider precious metal exposure for hedging geopolitical risk,” Lam said. “Some structured bank deposits may also offer good returns.”
Gold ETFs could also be a potential alternative for Hang Seng shareholders with a higher risk appetite, according to veteran forex trader and independent analyst Jasper Lo.
But they should wait for gold prices to fall from the current level of about US$4,460 per ounce to about US$4,000, he added.
Hang Seng Bank shareholders approve HSBC’s US$14 billion privatisation bid
HSBC receives strong backing from Hang Seng Bank’s independent shareholders, getting 85.75 per cent of the votes
Hong Kong’s banking sector began a new chapter on Thursday as Hang Seng Bank shareholders approved HSBC Holdings’ bid to take the lender private in a deal worth nearly US$14 billion.
It surpassed the threshold requiring approval from at least 75 per cent of independent shareholders and not more than 10 per cent against it. It excludes the 63 per cent stake in Hang Seng Bank already owned by HSBC.
Scam and corruption cases spark debate in China over cryptocurrencies’ future
The Chen Zhi arrest might push bitcoin prices down temporarily, but analysts said other factors will have greater sway in the long term
The seizure of enormous cryptocurrency caches in two high-profile criminal cases in China – a former head of the central bank’s digital currency research institute accused of corruption, and an alleged scam centre kingpin linked to about US$15 billion in bitcoin – have sparked questions in the country about the safety and future of virtual money.
But analysts said the long-term trend for the assets, especially bitcoin, depended on institutional capital, interest rate expectations and the likelihood of the United States’ Digital Asset Market Clarity Act being signed into law this year.
“While Chen is accused of crypto fraud and probably some element of coercion to scam investors, that is a separate issue to bitcoin’s price drop at the start of 2026, which is now at about 30 per cent lower than its all-time high,” said Sanjeev Aaron Williams, a Hong Kong-based lawyer who writes on geopolitical risk and the digital economy.
The trading of crypto assets has been banned for years in mainland China. The Chinese central bank, which has doubled down on efforts to promote the digital yuan, pledged a further crackdown on virtual money in October despite market calls for the introduction of yuan stablecoins.
Hong Kong, however, aims to become a global hub for crypto businesses.
