It’s decision time for HSBC, and more importantly, for holders of its HK$150 commemorative note.
HSBC has just announced a new round of job cuts — 50,000 worldwide — while many subscribers contemplate what to do with its 150th anniversary banknote which is being released today.
At the heart of the matter is whether to hold or sell and what to expect if they do sell.
The commemorative note, although tied to an intrinsic — ahem, nostalgic — value, is subject to market forces.
Just like seafood and stocks, it tends to fluctuate from one day to the next, but some astute Hong Kong investors seem to have a sixth sense about the law of supply and demand.
That’s how they made money speculating on everything from iPhones to yellow umbrellas and other collectibles.
Today thousands of lucky customers will receive their allocation of the anniversary note.
We can imagine a long queue sweltering under the summer heat outside the Hong Kong Convention and Exhibition Center.
By all accounts, it’s worth the trouble.
Already, the secondary market is offering up to HK$1,000 for a single note, up 160 percent from the issue price of HK$380.
Three-in-one uncut sets are hot at HK$4,000 each, up 190 percent from the original price of HK$1,380.
Uncut 35-in-one sheets are getting offers of as much as HK$40,000, with some reports putting the figure at an astounding 108,000 yuan (HK$135,000) on Taobao, up from the original HK$23,880.
HSBC’s “selected number” tender prices a single note at a minimum of HK$8,888, three-in-one uncut sets at HK$13,888 each and 35-in-one uncut sheets at HK$68,888 each.
Tender notes that have lucky numbers are expected to trade at a premium to the retail subscription notes.
Don’t forget the effect of the Hang Seng Index on all of this.
It tells you how much you will make if you put your money in a stock right now or if you invest it in an HSBC anniversary note.
Since the offer period for the note opened on March 6, the Hang Seng Index has gained nearly 13 per cent, closing at 27,315 yesterday from 24,193 on March 5.
Ironically, shares of HSBC lag the benchmark index. They were up just 8.3 per cent to HK$73.55 yesterday from their March 5 closing of HK$67.90.
The general feeling in the market is that the HSBC note is not as popular as Standard Chartered’s issue of a similar anniversary offering in 2009 to mark its own 150th year.
That’s far and away the biggest draw, eclipsing the 2008 Olympic note by Bank of China (Hong Kong) and Bank of China.
For reference, the Standard Chartered HK$150 note is worth HK$1,700 today. The Olympic note is trading at HK$1,000.
The HSBC issue, although 64 times oversubscribed, came amid an anti-corruption and frugality drive in China that curbed potential business from mainland collectors.
A trader told Apple Daily that the 35-in-one uncut set weighs in at 3.08 kilograms, making it a burdensome proposition for anyone trying to bring it across the border undetected.
Given the challenges, I hope you have a plan for cashing in on the HSBC nostalgia.
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