To Keep Reading
The Hang Seng index is a constant topic of conversation among those involved with Hong Kong stocks. Mentioned less frequently is the company for which the index is named , Hang Seng Bank (SEHK:11).
Hang Seng Bank isn’t just the company behind the index; it’s one of the top lenders in the enclave, and as such, it’s vital to Hong Kong’s financial life.
Like many giant companies around the world, Hang Seng Bank’s origins are very modest. Four business partners started the company in 1933 as a money-changing shop in the Sheung Wan district. Over the next few decades, Hong Kong thrived, and the company thrived along with it, becoming the lender of choice for a great many residents and businesses.
In 1960, Hang Seng Bank went public, and it’s been a mainstay on the stock market ever since. It’s also, by the way, been a mainstay on its namesake index, and is one of the index’s most heavily capitalized companies.
The 1960s in general would be very eventful for the company. In 1965, a tumultuous year for Hong Kong finance, the rival now known as HSBC Group acquired a majority stake in the company. It’s never relinquished that position; these days HSBC Group holds over 61% of Hang Seng Bank’s equity.
In 1969 Hang Seng Bank created its famous stock index. It rapidly became the benchmark not only for Hong Kong stocks, but also an indicator of the broader Asian market, and indeed one of the most closely watched indexes in the world.
Hang Seng Bank
These days, Hang Seng Bank is a major domestic retail bank. Some would even say it’s unavoidable; estimates have it that around half of the enclave’s population are Hang Seng Bank customers. These folks conduct their banking business at the company’s roughly 280 service outlets in Hong Kong.
As with any big native company, Hang Seng Bank has a presence on the mainland Chinese market, too. It established a formal subsidiary there in 2007 and operates a branch network in the country. It’s also active in Macau and Singapore, while it has a representative office in Taipei.
Hang Seng’s name means “ever growing,” and it’s managed to stay true to that lately. Its interest income grew to almost HK$38 billion in the most recently reported fiscal year, from just under HK$27 billion only two years earlier. Net loans and total assets also saw healthy rises, with the former increasing by 20% and the latter by 14% across that same stretch of time.
Hang Seng Bank is not only an indelible feature on the Hong Kong financial landscape, it’s part of the lives of many people and businesses in the enclave. And of course, having its name bolted to the enclave’s crucial stock index doesn’t hurt. So whether you’re an investor, a person who exchanges money or uses an ATM in Hong Kong, or someone who’s merely curious about the local stock market, the company’s name is part of your life to some degree.
Brexit has been catching investors’ eyes across the globe recently. Many UK based banks are listed in Hong Kong and tycoon Li Ka Shing’s business empire has substantial assets in the UK. Moreover, UK property is one of the favourites among Hong Kong individual investors traditionally.
We’ve recently published a Special FREE Report: “Brexit: Your 5-Step Investor’s Survival Guide” to help you conquer the Brexit mayhem; these are designed to try and help you protect your own portfolio (irrespective of the ultimate Brexit outcome) and explain how we think you could even turn the current situation to your advantage.
We highly encourage you to download a free copy right now—click here now!
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Eric Volkman doesn't own any shares mentioned.