How low is low for HSBC?
Here is a million-dollar question: could HSBC Holdings rebound like it had in the financial tsunami in the last decade?
The odds seem bad. Shares of HSBC fell to a 12-year low after it reported a lower-than-expected interim result with higher provisions and no dividend in sight.
HSBC is ranked one of the worst performers in the blue-chip index, having fallen 44 per cent year-to-date.
The elephant that serves more than half of the city’s population owes much to Hong Kong loyal shareholders, with many of whom religiously buying up the counter for dividend yield.
Unfortunately, all these end this year as the banking giant suspended dividend payment for its shareholders given the onset of global epidemic.
Worse still, the bank was torn between two lovers as it failed to please neither the US (because of its support to the national security law) nor Chinese government (because of the Huawei incident).
Apparently, HSBC has lost its appeal to investors. Many brokerages turned its back to HSBC with a downgrade to its target price.
Things can be worse for the rest of the year. The bank said it will continue to face a wide range of potential economic outcomes for the second half of 2020 and into 2021, partly dependent on the extent of any potential impacts from new waves of Covid-19, the path to the development of a possible vaccine and market and consumer confidence levels.
That will be on top of a heightened geopolitical risk in Hong Kong and the UK, lower global interest rates and reduced customer activity.
After an absolute domination for decades, HSBC’s market capitalisation of around HK$700 billion is way behind China Construction Bank, not to mention tech behemoths such as the Alibaba Group and Tencent Holdings.
If this falling trend continues, it would not be too long before the counter gets kicked out from the top 10 in Hong Kong.
We know the day will come, but not sure when.
Do not catch a falling knife.
-- Contact us at [email protected]
-
Unhappy moon festival for the rich Ben Kwok
For over 3,000 years, Mid-Autumn Festival has been the second-most important holiday after Lunar Chinese New Year. It dates back to when ancient Chinese worshipped the moon for bountiful harvests.
-
Passing into nothingness Neville Sarony
The poet John Keats described a thing of beauty not only as a joy for ever but “a bower quiet for us, and a sleep full of sweet dreams, and health, and quiet breathing.” I doubt that I am alone in
-
Balancing marine conservation and development Dr. Winnie Tang
The 2018 Policy Address put forward the Lantau Tomorrow Vision of which the first phase is the construction of artificial islands of about 1,000 hectares around Kau Yi Chau to provide approximately
-
Towards a more reasonable, effective quarantine policy Brian YS Wong
Much of this has been litigated and opined on to the point of death – but I’ll say it again: Hong Kong’s quarantine policy is ill-equipped for the rapidly shifting circumstances and evolving
-
Campaigners see total ban on e-cigarettes and HTPs Mark O'Neill
Seven years ago LegCo started to discuss the regulation of electronic cigarettes. Finally, public health advocates believe, it will next month pass a bill that outlaws the import, production,
