ONE colleague sent me a wire story yesterday describing a veteran Hong Kong stock commentator bursting into tears during a live TV broadcast as she watched HSBC’s share price plunge dramatically before Monday’s trading close.
"That was nearly you," she wrote.
Indeed, many investors, including myself, have been traumatised by the global lender’s dramatic fall from grace, after making a US$17.7 billion rights issue at a then very steep discount of almost 50 per cent to then traded price last Monday.
Unlike Citi, whose collapse in stock price could be viewed from the broad perspective of the impact on the rest of the global economy, HSBC’s 24 per cent drop in value on Monday directly hits the pockets of investors across the region.
Many of us are HSBC shareholders – some for generations. I have a former colleague who had been given some shares when he was a teenager. It became a goldmine after he kept it for decades.
We have also been loyal customers of the bank. When it closed its Ocean Towers branch two years ago, elderly folks formed a long queue to withdraw the personal effects that they had kept in its bank vaults.
I could recall one elderly lady, in her seventies, telling the counter staff that her mother-in-law transferred the safe deposit box to her name when she got married 50 years ago.
But despite years of loyalty, most of them had to find other safe havens outside the bank to keep their bling-blings and items which held precious memory to them.
We have put up with the increasingly poor and impersonal service provided by the bank over the years and forgive its various short-comings, blaming it on the tight labour market for the high staff turnover which also afflicted other banks.
HSBC has been putting out the spin that the cash-call will strengthen its balance sheet. It would also be in a strong position to make acquisitions, even as other lenders lick their wounds and withdraw back to their home market.
But cynical analysts and fund managers keep harping on the legacy issue of Household - the US sub-prime lender it bought six years ago - which continues to dog the bank even though it has cleaned up the mess with a huge write-off at the end of last year.
I recall that once upon a time, HSBC could pick and choose its customers. An old businessman friend said that he had to grow his business to a certain size before the bank would consider making him its customer. It is a mark of having arrived for the Chinese entrepreneur in Hong Kong and Singapore.
Why then did it fall madly in love with a business in the United States - namely, Household - to people which few other banks would want to do business with?
This love affair doesn't seem to have ended either.
The Financial Times reported that one activist shareholder, Mr Knight Vinke, wanted the bank to walk away from repaying the bondholders of HSBC Finance - which is what Household is named now – with capital from other parts of the bank, since they had no recourse back to the bank.
Meanwhile, I thought that Mr Sandy Flockhart, HSBC’s Asia-Pacific chief executive, sounded a trifle defiant when he told CNBC this morning that he would be picking up his HSBC rights shares.