HSBC 02 (0005) (Jun 10 - Dec 24)

[winston]

not vested

Valuation

From above graph, HSBC's current Price to Book value is about 0.8, which is below mean minus two standard deviation.

Even though, global banking industry still be affected by the European sovereign debt crisis and weak economy recover in U.S, we believe HSBC can grow with the right strategy.

HSBC withdraw from the low profit margin area (Russia, U.S, England) to emerging market (China, India), with the experienced management team, we expect HSBC maintain a high dividend payout in 2011.

The company is now suitable for middle-long term invest, forecast book value will be about $67 Hong Kong Dollars.

Price to book value will be about 1 times, which is mean minus one standard deviation, estimated earning per share is $6.4 Hong Kong dollars, the target price is about $67 Hong Kong Dollars.

According to above prediction, we give HSBC a” Hold” rating with an upside potential about 11.5% within 12 months.

Source: Phillips

[winston]

Exclusive: Senate investigating HSBC for money laundering

(Reuters) - HSBC Holdings PLC is under investigation by a Senate panel in a money-laundering inquiry, the latest step in a long-running U.S. effort to halt shadowy money flows through global banks, according to people familiar with the situation and a company securities filing

http://www.reuters.com/article/2012/01/ ... safternoon

[iam802]

Still on cost cutting exercise with jobs cuts of up to 30,000!

Banks can't make money without interest rates.

2 things that may happen :

1. Heli-Ben do one more round of QE

2. Heli-Ben raise interest rates over the next 2-3 years

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HSBC to Sell Insurance Units to AXA, QBE for $914 Million

http://www.bloomberg.com/news/2012-03-0 ... llion.html

HSBC Holdings Plc (5), Europe’s largest bank by market value, agreed to sell some of its general insurance businesses in Asia and Latin America for about $914 million.

Axa Group will pay about $494 million to acquire HSBC’s general insurance business in Hong Kong, Singapore and Mexico based on the net asset values as of Dec. 31, the London-based bank said in a stock exchange filing. QBE Insurance Group Ltd. will pay about $420 million for HSBC’s general insurance business in Argentina and the general insurance unit of Hang Seng Bank Ltd., a 62 percent owned subsidiary of HSBC.

Chief Executive Officer Stuart Gulliver has sold or closed 19 units at London-based HSBC since 2010 and is cutting 30,000 jobs to save as much as $3.5 billion by next year and revive profitability. HSBC, which earns most of its profit from Asia, has sold units in Japan and Thailand and in January agreed to sell operations in Costa Rica, El Salvador and Honduras to focus on bigger markets in Latin America.

“Motor vehicle insurance, which is a major element of HSBC’s general insurance business, has low margins and volatile profitability,” Dominic Chan, an analyst at BNP Paribas in Hong Kong, said by telephone today. “The business isn’t in line with HSBC’s strategy of seeking to tap high-net-worth clients.”

[winston]

not vested

Valuation

HSBC Current market price nearly 1X P/B, close to the five-year average minus one standard deviation, the Group has the concept of the emerging market, should enjoy a higher valuation.

However, the Group's cost-efficiency ratio slightly higher than the Peers, as well as its core capital adequacy ratio fell in FY 2011,investors have concerns the result of restructuring.

According to the operating performance of FY 11, we estimate that the Group is scheduled to reach the target thus, we give to " Accumulate" rating and 12 Month target price of HKD $75.

Source: Phillips

[winston]

not vested.

Valuation

HSBC Current market price nearly 1X P/B, close to the five-year average minus one standard deviation, the Group has the concept of the emerging market, should enjoy a higher valuation.

However, the Group's cost-efficiency ratio slightly higher than the Peers, as well as its core capital adequacy ratio fell in FY 2011,investors have concerns the result of restructuring.

According to the operating performance of FY 12 Q1, we estimate that the Group is scheduled to reach the target thus, we give to " Accumulate" rating and 12 Month target price of HKD $75

Source: Phillips

[winston]

Will this spread to HSBC and RBS as well ?

PM slams Barclays scandal as Diamond faces call to resign

Prime Minister David Cameron has called for management at Barclays bank to answer "serious questions" as pressure mounted on chief executive Bob Diamond to resign following a rate-rigging scandal.

Shares in the bank were down 8% as pressure mounted on Diamond to step down on Thursday after the lender was fined £290 million over claims it manipulated key interest rate markets.

There are fears the scandal could spread to lenders including HSBC and taxpayer-backed Royal Bank of Scotland.

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

HSBC BRACED FOR HUGE U.S. PENALTY

HSBC may have to pay a $1bn fine for failing to have appropriate controls in place to ensure it did not facilitate the financing
of terrorism and other criminal activities.

http://edition.cnn.com/2012/07/11/busin ... index.html

[winston]

not vested

US lawmakers lash HSBC over laundering controls by Dave Clark

US lawmakers accused the global bank HSBC of opening the doors of the financial system to terrorists, drug dealers and money launderers in a hard-hitting report.

Senators found the London-based lender allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh , to move billions of dollars in suspect funds into the United States without adequate controls.


http://www.newsmeat.com/news/meat.php?a ... &buid=3281

[winston]

HSBC in talks to settle U.S. probe

HSBC Holdings, which is under investigation by US regulators for allegedly laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter.


Source: SCMP

[winston]

not vested

<Research Report>HSBC HOLDINGS (00005.HK) retained Underperform, TP hiked to $68.6 by BofAML

Banks with capital market activities, are expected to gain support in the third quarter with rather benign bad debt trend, Bank of America Merrill Lynch said in a report, believing profits to hold up quarter-on-quarter.

To reflect the above factors, BofAML raised HSBC HOLDINGS (00005.HK) earnings per share forecast for 2012-14 by 6%/8%/5%.

However, BofAML believes it is still uncertain whether the management would offer asset return of 12% in 2013.

With an unattractive valuation, HSBC HOLDINGS is retained Underperform with target price hiked from $64.8 to $68.6.

BofAML expects HSBC HOLDINGS' first-half profit to reach $32.4 billion and second-half profit to amount to around $32.2 billion.


Source: AAStocks Financial News