Don't buy into the HSBC rights issue

HSBC is going cap in hand to shareholders to raise £12.5bn. But even though it's the healthiest bank in the FTSE 100, that's still no reason to take up the rights issue, says John Stepek.

We're in trouble now. Arguably the healthiest bank in the FTSE 100, HSBC, is now running to its shareholders with its palm outstretched.

The banking giant said this morning that it's looking to raise £12.5bn from shareholders. It also slashed its dividend by nearly a third. Pre-tax profit for 2008 came in at $9.3bn, down 62% on the previous year, reports the BBC.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.