HSBC rights issue–post mortem

The Financial Times reported today that 97% of the HSBC rights were taken up by investors.  The issue price for the new shares is 254 pence.  The other 3%, the rights that lapsed, became the property of  the underwriters and sub-underwriters.  These rights were exercised by them.  The resulting shares were sold this morning for 448 p. each.  

How did the sub-underwriters make out?  For each share they underwrote, they received a 2% fee, or 2.08p.  But, as I pointed out in my earlier writing about the issue, the fee is not the main source of income for the sub-underwriter.  For the 3% of the shares that the sub-underwriters took possession of, they received a profit of 194p per share, which works out to 5.82p for each share underwritten.

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