Billions wiped off London-listed banks as China cracks down on moving money overseas
More than £7billion was wiped off the value of some of London’s biggest financial stocks as fears rose of a crackdown by China on people moving money overseas.Bank HSBC fell 1.8 per cent, or 25p, to 1367p while fellow Asia-focused lender Standard Chartered dropped 2.8 per cent, or 56.5p, to 1955.5p and insurer Prudential, which makes most of its sales in China, fell 7.6 per cent, or 80.2p, to 974.8p.Reports have emerged that residents in mainland China face tighter restrictions on opening offshore investment accounts in Hong Kong, as Beijing tries to restrict money flowing out of the country.The Shanghai branch of the Bank of East Asia, one of Hong Kong’s biggest financial institutions, this week suspended the opening of overseas investment accounts, restricting wealthy clients’ ability to invest globally, according to the South China Morning Post.The bank said it was ‘following the latest guidelines from relevant regulators to ensure that the account-opening process is compliant and efficient’. Two other Chinese banks have also reportedly done the same thing. China crackdown: HSBC fell 1.8% while fellow Asia-focused lender Standard Chartered dropped 2.8% and insurer Prudential, which makes most of its sales in China, fell 7.6%Hong Kong’s financial system is more open than the mainland and has fewer controls. Beijing is trying to steer a massive outflow of capital back towards its domestic stock market after a record $1 trillion was pulled out last year as economic growth stuttered.This phenomenon – capital flight – can threaten economic stability as it can cause currencies to lose value and hit growth when investment dries up.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Billions wiped off London-listed banks as China cracks down on moving money overseas
