Shareholders Near Threshold to Meet HSBC's Top Executives
Hong Kongers have been mobilizing to recruit 5 percent of the shareholder base – the threshold required to trigger an extraordinary general meeting – to confront the bank over scrapped dividends.
A group named «HSBC Shareholder Alliance» has collected over 5,000 shareholders as of yesterday, or 3 percent of the British lender's shareholder base and 2 percent away from having the right to call for a meeting to meet the bank’s top executives.
HSBC’s decision to comply with the Bank of England’s call has enraged investors from Hong Kong whose retail investors own around one-third of the bank’s total shares and lost an estimated $1.3 billion from the latest dividend cancellation.
According to an «SCMP» report, more groups are being recruited to add pressure both directly to London and through Hong Kong. In addition to another group of 100 shareholders, the 420,000-strong Hong Kong Federation of Trade Unions has also joined and recently sent a letter to the local financial secretary Paul Chan Mo-po urging intervention.
Legacy of HSBC Stock
In addition to birthplace roots, HSBC shares to Hong Kongers have had a unique legacy that extends merely trading or portfolio management. Whilst undoubtedly not the responsibility of a profit-making entity, its high dividends – the current cut would yield 5.8 percent – legitimately serve as a source of income for many of the more needy in the city.
And in addition to pure financial implications, the bank’s stock has also been traditionally utilized as a gift akin to gold for newlyweds, fresh graduates, children savings and more. This gold-like status is likely to have provided technical market support over the years through the city’s retentive tendencies for the stock especially from those that rely on its dividends for real income.
