Hsbc Share Discussion Threads

[miata] 01/8/2006 07:42

Buy at a lower level, say 950p, enjoy the yield and wait until late 2007 for an upturn in US growth.

WestLB cuts to 'hold' from 'add'.

[gateside] 01/8/2006 04:55

Tipped in The Times

Investors can bank on HSBC in spite of potential risks
By Dominic Walsh



HSBC must wonder what it has to do to please investors.
Despite delivering record first-half results with profits up 18 per cent to $12.5 billion (£6.7 billion) the shares still slipped 3p to 971p.



Concerns seem to centre on several different potential risks.

First, investors appear worried about the cyclical nature of investment banking. Yesterday Stuart Gulliver, head of the corporate investment banking and markets (CIBM) division, was preparing to fly to America to try to ease shareholders' fears.

Despite its financial might, for many years HSBC was not regarded as a force to compete with the likes of Citigroup and Morgan Stanley on big investment banking deals. But three years ago the bank set out to change all that. Heavy investment in the division followed and costs have been higher than originally anticipated.

But yesterday it appeared the gamble was starting to pay off. Revenue growth in the CIBM unit is now outstripping cost growth and HSBC has won key advisory mandates on some of Europe's biggest takeovers and is leveraging its huge balance sheet to supply the debt to help to fund deals.

The second concern is over the state of the US economy.

Yesterday HSBC said that it had experienced higher than expected losses on mortgage originations. The acquisition three years ago of Household, a sub prime lender, has been an unquestioned success. But inevitably there must be concerns that earnings at the division will be hit by interest rate rises and the weaker housing market.

Meanwhile the fast-growing emerging markets operations are churning out profits at the moment - but investing in developing economies is not without risk. A senior staff member was killed in the Bombay bombings and employees at the company's branches in Lebanon are heroically trying to stay open for business. Markets such as these are typically more susceptible to shocks in the global economy.

Lastly, the recent acquisition of Panama's biggest bank has raised fears that HSBC may attempt a big acquisition. There is little sign of that at present - new chief executive Mike Geoghegan yesterday carefully chose to emphasise the benefits of organic growth.

The shares trade at a prospective price earnings ratio of just 12 - a rating more befitting a hum-drum utility than a global banking giant - and generate a prospective 4.3 per cent yield. Buy.

[miata] 31/7/2006 12:34

Div Yield(%) 4.4

[gateside] 31/7/2006 12:19

The mistake has probably arisen as HSBC announce their dividends in US cents.

[gnik] 31/7/2006 11:23

Is the quoted dividend yield correct at 7.46%

[penycae] 31/7/2006 08:19

In at 975.

[miata] 31/7/2006 08:18

Good results.

Half-year group pre-tax profit up 18 per cent to US$12,517 million (US$10,640 million in the first half of 2005).

Basic earnings per ordinary share up 13 per cent to US$0.78 (US$0.69 in the first half of 2005).

Second interim dividend for 2006 of US$0.15 per share

[miata] 31/7/2006 06:17

Market is expecting half-year profit to rise about 8% to $11.5bn. (Net Income $8.2bn)

[miata] 21/7/2006 08:21

HSBC has agreed to buy Panama's largest bank Grupo Banistmo for $1.77bn (£960m) in cash, adding 220 branches in Latin America, its fastest-growing market.

HSBC, Europe's biggest lender by market value, will gain access to five new markets in Latin America, where its revenue is growing at twice the pace of the bank's European and North American operations.

[miata] 12/7/2006 19:00

Thank you for the explanations - I was initially understanding that "cash held" meant cash received.

The point about XDs is under your methodology you would make a profit just by buying a day before a share went XD and selling the day after - as you are grossing up the divi by the notional 10% tax credit.

The 10% tax credit is merely a Gordon Brown introduced complexity to stop giving large tax credits to foreign holders and is worth credit at basic rate to UK basic rate and higher rate taxpayers.

Those without the benefit of large PEPs and ISAs may well do better by selling cum-div offsetting with losses on other shares.

[kenbachelor] 12/7/2006 18:03

MIATA - Sorry for not providing a better explanation than the above, but I was just going out when I posted it.

Profits (or losses) are based on the actual difference between what I pay for a bundle of shares, and what I receive when I sell them. What happens to the price when they go XD has no bearing except to reduce to change what I get.

All of the profit is subject to tax at whatever rate is appropriate to the individual. In the case of income from dividends, the divi is paid with a notional 10% tax. When tax is calculated, the divi is grossed up, tax is calculated and then what you pay is reduced by the notional tax on the divi.

Bearing in mind that people pay tax at different rates I can't think of a more accurate way of producing the figures but if there is one, I will be pleased to learn.

[kenbachelor] 12/7/2006 17:04

I pay 40% tax on my income.

[miata] 12/7/2006 16:59

All other things being equal (ie no market movements), when a share goes Ex Dividend its price drops by the amount of the dividend received. Hence the practice of calculating returns on a similar net basis.

[kenbachelor] 12/7/2006 16:50

MIATA

The figures are all gross and subject to tax like any other income. 16.8767p/9x10 comes out at 18.7518888. If you check you will see that the spreadsheet calculates the figures correctly but it only prints out to 3 decimal places, hence 18.8p.

[miata] 12/7/2006 16:29

Ken, Im impressed that you got paid bigger dividends than everyone else!!!

viz 18.8p when others received 16.8767p and 9.2p when we only got 8.2402p

[kenbachelor] 12/7/2006 16:23

Yes MIATA I know. I do a GannFan chart for them everyday, but they are not as secure as banks. High risk = high rewards if you get it right, but the truth is that very few of us do!!!

[kenbachelor] 12/7/2006 16:19

Sorry Guys, but I made a right so & so of closing the trades record. I hadn't put in the divi I received last week, so I made 4.53% in 6 months which is a lot better.

[kenbachelor] 12/7/2006 15:55

Thanks Gateside - I know you are not supposed to fall in love with a share, but I have to Barclays has been very good to me.

I've just update the trades record and it seems I've made 2.69% here in extactly 6 months, which is better than the B/Society will pay me so it hasn't been a complete disaster.

[miata] 12/7/2006 15:50

Put some excitement into your life, buy a little Billiton.

[Edit 12/1/06 price 971p now 1094p, up 12.7% +dividends]

[gateside] 12/7/2006 15:39

Ken.. I'm still holding HSBA and will continue to do so. So any updates to your charts will be most appreciated. Hope to see you back in HSBA at some point.

Good luck with BARC.

[kenbachelor] 12/7/2006 15:26

Well Guys, I've sold my HSBC holding and tranferred the money into Barclays. I will continue to update the GannFan chart in case anybody uses it.

[miata] 06/7/2006 16:09

HSBC is reported as intending to sell its staff quarters in Hong Kong for more than 700 mln hkd.

[kenbachelor] 06/7/2006 14:15

Well we are making good progress today, but they are still 20 below my sell target of 983.8p.

[kenbachelor] 02/7/2006 17:44

Latest Broker forcasts from Digital Look, from 982p to 1,200p