HSBC Recovery Faces Familiar Headwinds
City Index | May 03, 2019 13:18
Q1 could scarcely have gone better - in Asia
Whilst HSBC (LON:HSBA) shares still show the ravages of investor disdain stemming from a dire 2018, Friday is their best day since January, with a 3% rise at best.
- Q1 pre-tax profit +31% to $6.20bn, best in 14 quarters, forecast: $5.58bn
- Adjusted revenues, +9% to $14.4Bbn, 3 times the pace of adjusted operating expenses
- Core capital ratio rebounded to 14.3% after falling 50 basis-points in 2018
The biggest caution in the results was ironically represented by HSBC’s best return to previous strengths. 80% of Q1 profits were derived from Asia, with just 1% from Europe. And whilst the CEO’s aggressive spending crackdown helped all key divisions rebound, regionally, only Asia shone. Three years after a 14-year lawsuit over HSBC’s U.S. Household International ended, it still sees stateside operations as its “most challenging strategic priority”. Problem operations also showed little progress. Stock dealing tanked 34%, the worst equities performance across U.S. and European banks, leaving markets revenues down 5%.
Asia-over-dependence, intractable U.S. drag, and lacklustre rest-of-world have kept the share reaction measured most of the session.
The buyback pencilled in for the half-year amid improving capital could underpin the stock’s recovery. But Q1 momentum looks unsustainable. And of all giant lenders, HSBC has certainly been amongst the least predictable lately.
h3 Chart thoughts/h3- Stock reaches top of 660p-686p resistance zone
- Technical/fundamental outlook suggests near-term gap fill; watch 670p support
- True deterioration would be symbolised by a break of 200-day average support (latterly 655p)
- Remaining above 670p would imply conquest of the resistance zone soon
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Get The App
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.