Shares in banking giant HSBC (HSBA) are up around 10% to 310p after its largest shareholder upped its stake in the business.

Ping An Asset Management, the investment arm of Chinese insurance giant Ping An, has raised its holding in HSBC to 8% - from 7.95% previously - on the back of the company’s share price weakness.

The move is a big vote of confidence in the bank from Ping An and has caused both its London-listed and Hong Kong-listed shares to rally.

‘NOTHING MORE THAN A TECHNICAL REBOUND’

Speaking to the Financial Times, Hong Kong-based analyst Dickie Wong called the rally ‘nothing more than a technical rebound’, and said he was bearish on HSBC’s outlook due to geopolitical tensions affecting the company as well as the suspension of its dividend.

It comes after HSBC’s shares recently hit a 25-year low, with renewed concerns over its vulnerability to any fallout from worsening relations between China and the US.

Along with other banks, HSBC’s profitability has also been hit by low interest rates and quantitative easing, which has reduced credit spreads and put significant pressure on the net interest margin of its loan book.

Last month, the firm reported a 65% plunge in pre-tax profits for the six months to 30 June to $4.32 billion, against a market forecast of $5.67 billion, due to lower revenue and higher expected credit losses.

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Issue Date: 28 Sep 2020