Speculation is rife on Wall Street that big US investment bank Bear Stearns is a takeover target after it received emergency funding on Friday - and HSBC is among the institutions being touted as potential white knights.
However, analysts in Hong Kong yesterday cast doubt on reports the British bank might absorb Bear Stearns.
HSBC Holdings, the biggest European bank by market capital, had the resources to make an acquisition, The Wall Street Journal reported. The newspaper also identified private equity firms such as J.C. Flowers as possible buyers of the 85-year-old bank, the second biggest US underwriter of mortgages last year.
Fellow US bank JPMorgan Chase is seen as the most likely buyer, though, having, along with the New York Federal Reserve, injected funds in response to Bear Stearns' report that its cash position had 'significantly deteriorated'.
Analysts in Hong Kong cited HSBC's exposure to the subprime-mortgage crisis in the US, and the losses it had sustained as a result, as grounds for scepticism that it would bail out Bear Stearns.
Two weeks ago, HSBC announced a US$17.24 billion write-down on the value of its assets.
