HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Continued worries about the prospect of a Grexit are putting pressure on London's bank stocks, but HSBC Holdings is attracting particular attention Tuesday.

Stock investors are wary of the meeting between Greek Prime Minister Alexis Tsipras and other European leaders on Wednesday to negotiate the terms of Greek bailout package.

"Greece and the European Central Bank are still at loggerheads and the prospect of a Greek exit seems all the more likely. Greece is holding the rest of the eurozone to ransom as it awaits significant debt relief," says IG market analyst David Madden. "Traders are not taking any chances and financial stocks are suffering the most as the fear of a full-blown crisis is too much to bear."

HSBC Holdings and Barclays, both down 1.2% are amongst the biggest FTSE 100 fallers. Both got some support around midday on a Bloomberg report that the European Commission has granted Greece a six-month extension on its debt programme but remain down on the day.

HSBC is facing other headaches as well. UK Business Secretary Vince Cable has raised doubts over HSBC's claims to have cleaned up its act after allegations over activities in Switzerland in 2005 to 2007 that helped wealthy customers dodge taxes and hide assets, according to a Financial Times report on Tuesday.

The concerns were raised in a letter to HSBC Chairman Douglas Flint, the FT reported.

"I have been particularly troubled at suggestions that some elements of these practices may have continued much more recently, notably the allegations of your private bank’s former head of compliance in Luxembourg," Cable wrote in the letter, according to the FT.

Meanwhile, Reuters reported that HSBC faces investigation by US authorities and an inquiry by British lawmakers over the Swiss accounts.

On a more positive note for the global lender, Hang Seng Bank, HSBC's 62% indirectly held subsidiary, is to sell a stake of up to 5% in China's Industrial Bank Co, in a move to raise up to CNY12.73 billion, about GBP1.34 billion, before expenses for the subsidiary that will leave it with a stake of about 5.87% if all shares are sold.

HSBC said Hang Seng acquired shares in Industrial Bank for CNY1.7 billion in 2004, when it held a 15.98% stake in the bank before being diluted on Industrial Bank's listing in Shanghai. Hang Seng then spent CNY2.3 billion on shares in a 2010 rights issue, before being diluted in early 2013 due to a private placement by Industrial Bank. Prior to Tuesday's placing, Hang Seng held about 10.87% of Industrial Bank.

An estimated net gain of HKD2.8 billion will be booked by Hang Seng on the sale of the shares, to be recognised in the 2015 financial year, HSBC said.

Industrial Bank is a commercial and retail lender in mainland China, and Hang Seng is Hong Kong's second largest bank, according to its website.
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Markets: UK shares are trading mixed following the report that Chinese inflation has slowed to a five-year low and amid continuing concerns about a potential Greek exit from the eurozone. Like its bank constituents, the FTSE 100 spiked higher at midday on the Bloomberg report but remains down on the day.

FTSE 100: down 0.1% at 6,832.09
FTSE 250: up 0.5% at 16,658.05
AIM ALL-SHARE: up 0.1% at 699.95
GBP-USD: up at USD1.5229
EUR-USD: down at USD1.1315
GOLD: down at USD1,236.63 an ounce
OIL (Brent): up at USD58.31 a barrel
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Other Top Corporate News
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German discounters Aldi and Lidl are still gaining market share from the UK's four big supermarket chains, but Tesco and Wm Morrison Supermarkets have both managed to stem market share loss and falling sales, delivering their best performance in over a year, while J Sainsbury and Asda are losing more ground, the latest industry data from Kantar Worldpanel suggested. The big four grocers - Tesco, Wal-Mart Stores Inc-owned Asda, Sainsbury's and Morrisons - again saw a decline in their share of the UK grocery market over the 12 weeks to February 1, when compared to a year earlier, the Kanatar data showed. However, Tesco's sales in the 12 week period actually rose by 0.3% year-on-year, having returned to growth for the first time since January last year, although it continues to lose market share, down to 29.0% from 29.2% a year ago.
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Shares in Babcock International Group were trading higher after the company said the strong performance in the first half of its financial year has continued into the second and said it is confident on meeting full-year expectations. However, Babcock did warn it faces some impact from the oil and gas industry spending cuts resulting from the drop in the world oil price. The company said it entered the fourth quarter of its financial year, starting January 1, with its order book at around GBP20 billion and a bid pipeline of around GBP13 billion. Its order book provides 70% revenue visibility for its 2015-16 financial year, it said.
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Recently merged travel operator TUI AG said it reduced its underlying operating loss in its financial first quarter, supported by a 5.4% increase in revenue, an improved profit performance from its hotels and resorts, and a return to profit for its cruise ship division. The enlarged group, said it is confident of delivering full-year underlying operating profit growth of between 10% and 15% at constant currency rates. TUI reported an underlying loss before interest, tax and amortisation of EUR107.9 million in the three months ended December 31, better than the EUR141.1 million loss in the first quarter of the year before, partly benefiting from a EUR16 million profit from the sale of Riu Waikiki within TUI Hotels & Resorts.
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Mondi said it expects its underlying operating profit for 2014 to be higher than the year before and said it expects to book after-tax charges below what it booked last year. The FTSE 100-listed paper and packaging company said it expects its underlying operating profit for the year to December 31 to be higher than the EUR699 million posted in 2013, though it did not provide guidance on how much higher it expects it to be.
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Millennium & Copthorne Hotels reported a 36% drop in its pretax profit for 2014, after last year's profit and revenue was boosted by the sale of the Glyndebourne development the year before, although the group's underlying business continued to be driven by higher room rates, occupancy and hotel acquisitions. The FTSE 250-listed hotels operator reported a pretax profit of GBP188 million for 2014, compared with a GBP295 million profit in 2013, as revenue fell by more than 22% to GBP826 million, down from GBP1.06 billion the year before. The group sold 147 condominiums in the Glyndebourne development in Singapore back in December 2013, which boosted both revenue and profit during that year.
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Catlin Group reported a 13% rise in pretax profit as improved investment return more than offset a fall in the specialist insurer's net underwriting contribution. The group's annual results stand to be its last as a public company, having retained a listing on the London Stock Exchange since 2004, in the wake of a GBP2.79 billion takeover bid by XL Group PLC last month. In a statement, the specialist insurer said it made a USD488 million pretax profit in 2014, compared with USD432 million in the prior year.
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Housebuilder Bellway reported a rise in sales in the first half and a strong rise in off-plan sales, adding it is confident on its outlook for the full year. The company said its housing completions in the first half of its financial year to the end of January rose to 3,754 from 3,245 in the comparable period a year earlier. Its average selling price in the period was up around 3% to GBP219,000 from GBP212,071 last year, with the average selling price of private homes up by around 7% to GBP240,000. Its forward order book, or off-plan sales, rose to GBP975 million at the end of January, up 25% on the GBP783 million reported at the same time in 2014.
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ICAP said it remains cautious due to challenging conditions in its global broking division, which has been forced to narrow its focus due to the new operating backdrop in the wake of the financial crisis. ICAP said revenue in global broking declined by 8% during its third quarter to the end of December at both constant currency and on a reported basis. Excluding businesses that were exited, the decline was less pronounced, at 4%, ICAP said.
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Halma said it expects adjusted pretax profit for its financial year to March 28 to be in line with market expectations, as it continues to see organic constant currency revenue growth in all of its regions. Halma adjusts its pretax profit for amortisation, acquisition costs and profit on the disposal of operations. The technology company said it believes the current market forecasts for its adjusted pretax profit are in the range of GBP145.6 million to GBP156.5 million, with a consensus of GBP150.7 million.
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AIM Movers
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Premier African Minerals, up 9.1%. The multi-commodity natural resource company gave an update on its mineral projects, including news that it has seen "encouraging", positive results from the open pit trenching programme at its RHA tungsten project. The group said that the positive results from the open pit trenching programme at RHA, both confirms the geological model and offers the prospect of additional high-grade mineralisation within the pit envelope. XLMedia, up 4.7%, confirmed, following press speculation, that it is evaluating a few potential acquisition targets, including TLV Media Online. Israeli-based TLV operates a digital advertising platform. XLMedia said it is actively pursuing additional acquisitions to use its strong cash flow and funds it raised in its initial public offering in March 2014.

Northern Petroleum, off 19%. The company said it has suspended work on Well 102/11-30 at the site. The drilling in the lower zone was water wet and while the upper zone produced oil, the water cut was too high to be economic within the current oil price environment, it said.
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Top Economics And General
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UK industrial production declined by more than expected in December, while the manufacturing sector maintained its growth, the Office for National Statistics said. Industrial output fell 0.2% from the prior month, after staying flat in November. It was expected to fall by 0.1% Manufacturing output gained unexpectedly in December. Nonetheless, growth slowed to 0.1% from November's 0.8%. Economists had forecast a 0.1% fall in December. The annual growth in industrial output halved to 0.5% in December, in line with forecast, from 1.1% in November.
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Like-for-like sales in the UK added just 0.2% year-on-year in January, the British Retail Consortium said. That was well shy of forecasts for an increase of 0.5% following the 0.4% decline in December. Overall retail sales climbed 1.6% on year in January, accelerating from the 1.0% growth in December.
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Chinese inflation slowed to a five-year low in January on easing food inflation, giving space for the central bank to adjust monetary policy to support weakening economic growth. Inflation eased more-than-expected to 0.8% in January from 1.5% in December, the National Bureau of Statistics said. This was the lowest since November 2009. The annual rate was seen at 1%.
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Greece's leftist-led coalition government, which has vowed to overturn a series of austerity measures that were a condition of its international bailout, will seek a confidence vote in parliament - two weeks after it was elected to power. The ruling SYRIZA government which has a 162-seat majority in the 300-seat parliament together with his junior coalition partner, the small right-wing Independent Greeks, is expected to have no trouble winning the confidence vote, scheduled for midnight. The vote comes less than 24-hours ahead of a crucial emergency meeting of Eurozone finance ministers meeting on Wednesday on Greece's financing needs.
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Ukrainian combat troops launched an attack on pro-Russian separatists east of the port city of Mariupol, one day before the leaders of France, Germany, Ukraine and Russia are due to discuss a fresh ceasefire in the Belarussian capital, Minsk. National Guard units broke through the opponent's defences, Ukraine's National Security Council said, adding that council secretary Oleksandr Turchynov was in Mariupol to coordinate the fighting. The Azov volunteer battalion, which is part of the National Guard and has controlled the area since May, said its forces have taken a number of villages east of the city and would press on towards the town of Novoazovsk.
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US President Barack Obama and German Chancellor Angela Merkel vowed to pressure Moscow to end its incursion in Ukraine. Fresh off a round of shuttle diplomacy between Kiev and Moscow, Merkel updated Obama on diplomatic efforts as Obama weighs sending weapons to Ukraine if talks fail. Calls are mounting in Washington for providing weapons to Kiev. Germany opposes arms shipments out of concern for inflaming the situation with Russia. Obama told reporters he had not yet made a decision about sending weapons but was weighing "all options". Merkel emphasized the importance of repeated diplomatic efforts even as she acknowledged they might not be successful. "When you have a situation now where every night you see people dying, you see civilian casualties, you see the dire conditions under which people live, it is incumbent upon us as politicians, we owe it to the people to explore every avenue until somebody gives in," she said.
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The conviction for sodomy of Malaysia's Anwar Ibrahim was upheld by the country's highest court Tuesday, paving the way for the opposition leader to be sent to jail. Federal Court Chief Justice Arifin Zakaria, who read the decision for over two hours, said the appeals court was right in finding the complainant Saiful Bukhari Azlan as a credible witness, and to have ruled the DNA evidence in the case was not degraded.
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Afternoon Watchlist (all times in GMT)

13:20 US Fed's Lacker speech
13:55 US Redbook index
14:00 US NFIB Business Optimism Index
15:00 US IBD/TIPP Economic Optimism
15:00 US JOLTS Job Openings
15:00 UK NIESR GDP Estimate
15:00 US Wholesale Inventories
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Wednesday's Key UK Corporate Events

WS Atkins - Q3 Interim Management Statement
ARM Holdings - Full-Year Results
Reckitt Benkiser - Full-Year Results
Telecity - Full-Year Results
Thomas Cook Group - Q1 Interim Management Statement
City of London Investment Group - Half-Year Results
Electrocomponents - Interim Management Statement
Homeserve - Interim Management Statement
QinetiQ Group - Interim Management Statement
Dunelm Group - Half-Year Results
Tullow Oil - Full-Year Results
City of London Investment Trust - Half-Year Results
Redrow - Half-Year Results
Glencore - Q4 Production Report
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Wednesday's Key Economic Events (all times in GMT)

EU Eurogroup meeting
Japan National Foundation Day
02:00 China New Loans and M2 Money Supply
07:45 France Current Account
12:00 US MBA Mortgage Applications
13:00 US Fed's Richard Fisher speech
15:30 US EIA Crude Oil Stocks
19:00 US Monthly Budget Statement
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