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

[winston]

Hmm... when a company is doing so well, why do they want to share their profits with you ?

DJ HSBC CEO: Planned Shanghai Listing To Raise 'Significant Amount'

SHANGHAI (Dow Jones)--HSBC Holdings PLC (HBC) expects to raise 'a significant amount' of funds from its planned listing on the Shanghai Stock Exchange, Chief Executive Michael Geoghegan said Wednesday.

Geoghegan didn't specify the fund-raising target, but told reporters at the launch of the bank's new China head office in Shanghai that HSBC would use the proceeds from listing yuan-denominated A shares to finance the bank's China operations.

'As the rules haven't been published it will be difficult to say how much we will raise from China, but I'd say it would be a significant amount,' Geoghegan said.

The U.K.-based bank, which on Wednesday opened its 100th outlet in China, is working toward becoming one of the mainland's first foreign-listed companies when regulations allow, to tap into the country's huge liquidity and to raise its local profile.

In January, Geoghagan relocated to Hong Kong from London, highlighting the rising importance HSBC places on Asia for growth.

By Rose Yu, Dow Jones Newswires

[LenaHuat]

HSBC seems to have timed its advertisements in the BizTimes with the announcement of its good operating results. Yesterday and today (surprise ) it placed 3/4 page-width advertisements promoting its Premier services (wow...3/2 nite packages to MBS etc). This 3/4 page-width could not possibly fail to catch any reader's attention.

It might soon get to 3/4 page-length adverts.

[winston]

Subprime Part 2

Housing ills seen bruising HSBC
Derek Yiu and Bloomberg

HSBC Holdings (0005) may suffer a loss of US$5 billion (HK$39 billion) from the American mortgage foreclosure crisis, according to research house Canaccord Genuity.

The bank - which has a US subprime unit, Household International - made 9 percent of its total mortgages of about US$81 billion in the United States, analyst Cormac Leech wrote in a note.

Assuming a 3 to 6 percent loss on these mortgages, HSBC will see a pretax cost of US$2.5 billion to US$5 billion. The amount is about 2 percent of HSBC's market value.

"HSBC is the most obviously affected of UK banks," Leech said. But he also noted the lender has "limited exposure" and "any near-term sell off for HSBC on this issue will most likely represent a buying opportunity."

Six Taiwanese financial institutions have recently taken HSBC to court in Los Angeles, asking for US$526 million in fraud damages.

HSBC's shares closed up 1.2 percent at HK$81.80 amid a market upswing.

Meanwhile, investigations by attorneys general in all 50 US states have led people to believe banks will have to repurchase billions of dollars in lending from mortgage-bond investors challenging the paperwork.

In some states, lenders have suspended foreclosures and started reviews after some court documents showed that staff at some large mortgage firms signed papers without verification.

Repurchases may cost the industry as much as US$120 billion, JPMorgan Chase analysts said.

In another development, HSBC opened its 23rd mainland branch yesterday. The Nanjing branch will fhave an initial staff count of 25.

HSBC China also has 80 subbranches in 26 major cities.


http://www.thestandard.com.hk/news_deta ... 01020&fc=4

[winston]

Not vested. From Phillips:-


Valuation

After suffering from U.S. subprime crisis and sovereign debt crisis in Europe, the stock price is attractive that the current PB ratio is 1.33 times which is lower the mean of ten years plus one standard deviation. According to its record, the stock price of HSBC in 10 March, 2009 was HK$ 33 which was a record low in ten years.

At that time, the PB ratio was fell out of the mean of ten years plus two standard deviation. After that, the stock price was rising. However the current price is still slightly lower than the mean of ten years plus one standard deviation.

We believe that the current price of HSBC is attractive and with medium to long term investment value. However, it will still be affected by the crisis of sovereign debt crisis in Europe in short term. The short term upside potential is not large.

We believe that the stock price has further upside potential. We forecast that the P/B ratio of next year will increase to 1.48 times which is within the mean of ten years plus one standard deviation. And the estimated PE in 2010 is 15 times.

The estimated book values per share and the earning per share are HK$ 61.80 and HK$ 6.08 respectively, which are equivalent to US$ 7.92 and US$ 0.78. According to the forecast, the 12-month target price of the company is HK$ 91.50, compared to current price, the upside potential is around 15%. We give the company a “BUY” rating.

[iam802]

2011Jan-HSBC Holdings plc-800x600.png

A clear, high volume breakout above the kumo.

[iam802]

Think a lot of banks are hit. A friend in the US is facing same issues as well; the boss has just been laid off. Things does not look bright over there.

------
HSBC may cut more than 10,000 jobs: report

http://www.reuters.com/article/2011/07/ ... L620110728

HONG KONG/LONDON - Banking group HSBC Holdings Plc may cut more than 10,000 jobs as part of its plan to slash costs by up to $3.5 billion a year, Sky News reported Thursday.

New HSBC Chief Executive Stuart Gulliver in May announced a far-reaching plan to cut costs and revive flagging profits by exiting dozens of countries and refocusing on its areas of strength.

Gulliver did not say how many jobs would go as part of the cuts, but analysts expect the bank to axe thousands from its 300,000 global workforce.

Sky, citing people close to the bank, said Thursday the plans had not yet been finalized. HSBC declined to comment.

The bank could provide an update along with its half-year results Monday, although analysts said costs are likely to have remained high in the first half of this year as the restructuring is a multi-year plan.

"There was a lot of talk about streamlining going on at the last strategy day, so I suppose this is a function of that," one top 10 HSBC shareholder told Reuters. "It is a quite sprawling bank, and I wouldn't be surprised if it has got a bit bloated here and there," he said.

Europe's biggest bank faces an urgent need for action as more than two-fifths of its businesses are not delivering their cost of capital. "We clearly have a cost problem," Gulliver said in May.

HSBC said it will also sell, shut or slim down retail operations in 39 markets, where operations are sub-scale and unprofitable and is looking to sell its U.S. credit card arm and shrink its network of 475 U.S. branches.

HSBC's move would be the latest in a wave of cuts announced by the global financial industry, which has been hit by market volatility and lackluster profits. Swiss bank Credit Suisse said Thursday it would cut about 2,000 jobs.

Standard Chartered, Lloyds, Goldman Sachs and UBS are among banks that have announced job cuts in recent months, hit by rising costs and weak revenue growth.

State Street Corp, one of the world's biggest institutional investors, said earlier this month it would eliminate as many 850 jobs from its technology unit as it tries to curb costs.

HSBC has already cut 700 jobs in its UK retail banking arm in June this year out of its staff of 55,000 in the country, one of many banks that have said they will cull jobs to save costs as lenders grapple with off a limp economic recovery.

...

[LenaHuat]

I have been tracking what Garry Evans, HSBC's global strategist, has been saying over some 2 weeks now. Teh Hooi Ling of BT wrote an article today about what GE thinks of the US debt default. This man has changed from 'optimistic' to a 'more than 50% chance that the US will miss next Tuesday's deadline'.

[iam802]

Lena, you got it right.

If I recall, that deadline comes from Geithner.

I believe the 'real' deadline will be another 2 weeks from Aug 2.

Looking at the situation now, it is unlikely that they can come to an agreement before Aug 2.

[LenaHuat]

Hi iam802
Yes, the Treasury still has cash for some 2 weeks up to mid-Aug. Yesterday some one on CNBC said that Obama was not acting presidential but petulant. I agree. The Tea party will buttonhole the republican party to ensure that the budget will be a PE2012 issue. It will be only a short-term compromise even though Obama had express his refusal to sign a temporary agreement.

Wondering if I should sell my holdings to lock in gains. Winston has posted a report by Credit Suisse anticipating a 30% correction in stocks.

[iam802]

I think it will still run up one more time (after it has been approved).

After which, I believe 'factory orders' will be the next focus (but it won't happen so fast).

We have seen news on possible slowdown from China already.

I think it will hit the US mainstream media that the 'factory orders' will be an issue (some time in Q4).

Hence, I have no intention to hold my positions beyond November.