Borders closed, options open

20 May 2009 By John Foley Follow @johnsfoley

Issuing yuan bonds and applying to list in mainland China show HSBC jostling to be Beijing s favourite foreign bank. It faces stiff competition from China s fastgrowing staterun lenders. If being stateless has been an asset for HSBC, looking Chinese may now count for more.

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HSBC confirmed on May 19 that it had received approval to issue a yuandenominated bond in Hong Kong, making it the first nonChinese bank to do so. The bonds would be used to support the bank's Chinaincorporated business, and would most likely draw on yuandenominated savings of Hong Kong investors.

HSBC has also applied for a listing on the Shanghai stock market, which would make it the first foreign firm to issue shares in the mainland. Chief executive Michael Geoghegan told investors it wasn't clear whether, or when, approval would be granted. HSBC already has listings in London and Hong Kong.

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