Dah Sing Financial Holdings Ltd. (440) and its banking unit slumped the most in five months in Hong Kong trading after they proposed raising a combined HK$2.1 billion ($271 million) from selling shares at a discount.
The parent company tumbled 6.4 percent to HK$33.20, while Dah Sing Banking Group Ltd. (2356) sank 7 percent to HK$11.16 as of 10:48 a.m. Both stocks fell by the most since Oct. 28. Dah Sing Financial will offer shareholders rights to buy about 39 million shares at HK$23.40 apiece, while its unit will sell at least 150 million shares at HK$8 each, they said in an exchange filing.
Dah Sing Financial plans to use the proceeds from the sale to buy more shares in the banking unit, easing speculation that the lender may be sold. Dah Sing Banking had surged 31 percent since June 30, while its parent rose 14 percent, as investors bet that a rival seeking to benefit from Hong Kong’s role in cross-border financing may seek to purchase the bank.
“The announcement of a rights issue suggests that a takeover is unlikely for Dah Sing,” Jim Antos, an analyst at Mizuho Securities Asia, wrote in an e-mail. “As a result, some of the speculative money is leaving.”
Yue Xiu Group offered in October to buy a majority stake in Chong Hing Bank Ltd. (1111) for $1.5 billion, the first acquisition of a Hong Kong lender since 2009. Singapore’s Oversea-Chinese Banking Corp. is in exclusive talks that expire on March 31 to buy Hong Kong-based Wing Hang Bank Ltd. (302)
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