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Pin to quick picksHSBC Holdings Share News (HSBA)

Share Price Information for HSBC Holdings (HSBA)

London Stock Exchange
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Share Price: 705.50
Bid: 707.20
Ask: 707.30
Change: 0.50 (0.07%)
Spread: 0.10 (0.014%)
Open: 706.50
High: 714.40
Low: 705.00
Prev. Close: 705.00
HSBA Live PriceLast checked at -

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Nomura downgrades StanChart, HSBC, Barclays

Fri, 18th Mar 2016 12:12

(ShareCast News) - China's economy was set to slow more sharply than most analysts were expecting, leading to a further devaluation of the country's currency, the yuan, which in turn would weigh on the broader emerging market currency space and business for the likes of HSBC and StanChart, Nomura said.Asia's largest economy would see the rate of expansion of its gross domestic product slow to 5.8% in 2016 and 2017, versus consensus forecasts for growth of 6.5% and 6.2%, respectively, the broker said in a research report sent to clients and dated 17 March, leading it to downgrade both lenders' stock from 'neutral' to 'reduce'.The more challenging macroeconomic environment would create revenue-headwinds for HSBC, notwithstanding its strong underwriting standards relative to peers in Asia.However, Nomura was not expecting a dividend cut, although the risk was rising.As regards StanChart, on top of the macro risks its wholesale banking unit was facing both structural and cyclical headwinds whereas retail banking was still too small to achieve economies of scale.Those challenges would result in a continued deterioration in the bank's asset quality trends, thus complicating an already difficult restructuring.Having come 23% off its most recent lows the broker told clients it was taking the opportunity to downgrade StanChart.Among some of the other risks looming over StanChart's share price were the possibility of additional negative credit risk migration, risk-weighted-asset inflation and IFRS 9; combined those negative factors might hit the bank's core equity Tier 1 capital by aproximately 250 basis points.In the same note, Nomura downgraded its recommendation on Barclays from 'buy' to 'neutral' and stuck by its 'neutral' recommendation on RBS."With the downgrade of BARC, STAN and HSBC, we move to neutral on Domestic UK banks and underweight on Asia-exposed UK banks in a European context. We expect upside in all domestic UK banks on a 2018 look-through, but think this is similar to the broader sector, barring LLOY (which remained their top-pick)," Nomura concluded.For Barclays, Nomura added: "While we move to Neutral, we do see upside, especially if IB revenues recover cyclically. That said, cost and structural reform headwinds will remain material. We therefore recommend that investors use any material rallies from current levels to reconsider their positions in the stock."
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