Why is no-one talking about HSBC?

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HSBC Trading Halted Amid Expectations Of Rights Issue
(Adds plans to cut dividend, scaling back of U.S. consumer finance operations, change in results announcement time.)

HONG KONG (Dow Jones)--HSBC Holdings PLC (HBC) suspended its shares from trading Monday pending the release of "a corporate action," amid expectations the banking giant is planning a huge rights issue.

People familiar with the situation said Sunday that HSBC will announce Monday plans to raise at least GBP12 billion in fresh capital in what could be the largest-ever rights issue by a U.K. company, as well as a "moderate" cut in its dividend.

HSBC declined to comment before the official announcement.

Newspaper reports gave varying details of the expected rights issue.

The Sunday Telegraph said the bank plans to raise GBP12 billion through a two-for-five rights issue priced around 300p, a discount of more than 40% to HSBC's London closing level on Friday of 491.25p.

The U.K. paper said the preemptive offering would be underwritten by Goldman Sachs Group Inc. and JP Morgan Cazenove Ltd.

Hong Kong's Chinese-language Apple Daily Monday cited unnamed sources as saying HSBC will raise capital via a five-for-12 rights issue, priced at a 47% discount to HSBC's closing price in London.

There has been a slew of rights offerings by Western financial institutions over the past 14 months, with a total of US$94.8 billion raised by banks, according to data provider Dealogic.

If HSBC's plan goes ahead, it could be the largest-ever single private capital raising in the U.K., eclipsing a GBP12 billion share issue done by Royal Bank of Scotland Group PLC last year.

People familiar with the situation said HSBC will also announce at its 2008 results conference later Monday a scaling down of its U.S. consumer finance operations.

Household International Inc., which was later renamed HSBC Finance Corp., was saddled with U.S. subprime mortgages and has been a drag on the lender's performance over the past two years.

HSBC had already ceased originating new U.S. auto loans and it will stop providing personal loans, while continuing to offer credit cards, the people said.

The bank said Monday it will announce the details of the corporate action together with its 2008 earnings report at a news conference at 0800 GMT. The time of the conference was brought forward from 0845 GMT.

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