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https://www.scmp.com/business/banking-finance/article/3091031/china-loosens-rules-fund-flows-between-greater-bay-area
In response I attach the above to illustrate the massive advantage in terms of potential over UK rivals. Hingston is recently promoted head of HK, with all those below him moving up one notch, based upon the perceived success locally. I’d have limited faith in any of their ability to truly maximise the overwhelming opportunity, however, it’s so vast they will probably stumble to “success” versus internal group equivalents and UK peers who are not in the game locally.
Quinn has effectively publicly stated the group’s asset allocation is Asia, so that’s what investors should consider in what for now is a British bank. Are you a believer in the region’s future, the political backdrop and a British bank’s ability to manoeuvre its way through the peaks and troughs ? Will it be able to stay a British bank and do you wish to be invested in a bank that potentially becomes like so many other Chinese banks and be state controlled ?
These are the realities of an investment in HSBC, if you would not pick a unit trust with such weighting then I don’t think the British bank wrapper should fool anyone.
Aside from the costs of patience shareholders have endured , the facts remain. HSBC is surrounded by varied risks from an economic and political backdrop.
Should there be confidence in the big 3 appointments to arrest what could become an historical slide ?
Chairman Tucker - not a banker. Long time HK face enjoying success in CEO roles at both AIA and previously, Prudential. Will be familiar with mainland landscape but who could not have succeeded in the past decade plus of massive repatriation of Yuan into the global financial system via insurance bonds ? The commissions so widely criticised and removed in UK markets prevail and are of little consequence to those seeking to switch large volumes of cash out of China. As I’ve described elsewhere, the continued closed border and this easy money is what is hurting HSBC not this assumption that loans turn bad overnight. Still under DPA in US, Tucker will do well to maintain legitimate income as scrutiny and interpretation of it intensify.
CEO Quinn - insider whom Tucker turned to in what seemed a very public last resort when notable outsiders approached and declined the poison chalice invitation after a prolonged period of searching. Part of the old guard, an era where acquired business has now been lost as regulatory adherence meant mass enforced customer exits In the face of inevitable censure. Has now filled the basket full of Asia eggs and entrusted the limited existing talent pool in Hong Kong to be an even greater saviour, whilst shedding thousands globally whom do not share the previously mentioned market advantages.
CFO Stevenson - ex RBS, hence will be accustomed to a crisis and one assumes his appointment was around competency there, rather than jobs for the boys that saw those that preceded taking their “skills” to similar roles at Glaxo ? Further assume he sits in UK or is he enjoying tax advantages in HK also ? If numbers are his responsibility, perhaps volume and value of HSBC accounts held by global hierarchy in HK may be something he and gatekeepers need ponder from a CRS perspective ? Maybe something to remind all of their tax responsibilities when that next global meeting is scheduled to align with Hong Kong 7s rugby ? As an aside, anyone know the eventual outcome of past CEO Stuart Gulliver Panama papers and UK/HK tax investigation by inland revenue ?
Netflix Dirty Money featuring HSBCis such a revealing watch and surely has a great follow up episode just waiting to be filmed ? Who might be the leading characters ?
Let’s dream of it being a tale of where they turned matters around
It’s a good question given the current state of play, HSBC are coming from a considerable low and have an advantage like no other in Asian markets ,where wealth is a completely different league and has to be seen and experienced to believe. Their revenue and profits in the region are ample proof, however, is it correct to describe them as a British bank ? Will they stay that or even be subject to take over from within China with public alignment to CCP approach to Hong Kong ? As an investor, what that brings or how it is achieved are unique considerations, as are the realm of other risks associated with reliance In a more volatile geography than the much maligned British market. Given the regularity of scandals associated with the group, the more cavalier regulatory environments may suit their appalling mismanagement, rolling the dice versus censure may be less fraught, not that they have ever been properly reprimanded.by Western authorities to date. That may change moving forwards unless they divorce themselves completely, recent creation of Birmingham HQ is looking increasingly peculiar ? Guess they ignored the protests on the streets in recent years and the possibility of a Beijing response before 2047 ? Yep, experts in Asia ? They may still top the British pile with significant advantages, but it won’t be by the proven lack of effective management.
https://www.marketwatch.com/story/massive-forgery-helped-hide-3-billion-hole-in-energy-traders-books-2020-06-24-7103319?mod=mw_latestnews
Another potential hit in the billions column, just how many global failings will it take to bring them down ? Better get better at spotting irregular accounting as their all in bet on Asia is an environment not highly regarded for accuracy of numbers !!
https://www.investmentweek.co.uk/news/4016801/gbp-3bn-fraud-claim-filed-hsbc-uk-bank-sham-investment-scheme
Given Asia and HK in particular makes virtually all the revenue and profit, can they afford this potential hit in one of the woeful businesses that are falsely described as global strength ? In the UK also where vast sums have been spent on setting up a new Birmingham HQ, which may end up being a complete waste as political allegiance choice indicates the decision makers need to be in Asia ? What an absolute nonsense this bank has become, scandals of varied types following them around the globe and culture all wrong, you’d think they’d have learnt lessons by now but obviously penalties have been too lenient. A complete move to Asia seems a better bet where their disregard for correct practices will be better aligned to Beijing tolerance, as for sure, the West is now unlikely to offer the easy ride for indiscretions regularly seen previously. If this action is successful, is that the UK contribution into negative ground ? If this were a soccer club, the cries of ‘sack the board’ would have been ringing out louder and louder !!!
Still waiting on news of what backs up Trump comments arounD Hong Kong ? Perhaps waiting on next moves by the other side, they are imminent and maybe will gauge matters around that detail and timeframe ? Or has he lost interest with matters at home and the re-election trail, now officially underway ? As significant to HSBC is reopening of border with China, still awaited and latest guesstimate is July 7th. Any escalation of second wave virus will delay and prevent the influx of volumes of mainlanders seeking to repatriate cash, all of which is of course stewarded by the bank”s AML functions !! Recent congratulatory shuffles in local management see the belief that the business is succeeding without need for fresh ideas or faces, the gravy train for mediocre talent on an easy China track continues, though none will have appetite to stay as China political influence over the bank and city grows. HSBC will be front and centre of any change to come, if it is aggressive they are woefully under prepared for what will follow
Didn’t realise you were adopting a short term strategy, that wasn’t clear. Not much fat left now once stamp duty etc deducted. Think your genius of 373p might not be the low could be another winner ?? The gains were a good short term hit, poor compared to others, if you cashed in but given your faith expressed and no bear view until now, I sincerely doubt that. What’s your new low then, given you personally rate the stock so highly ? Or do you want the market to reverse again first ?
So your 373p low call was based upon market conditions being in your favour and the momentum one way Ie upwards ? Now you want to start a new post hinting at a new low based upon downward market movement ? Like HSBC you are trying to ride 2 horses ?? look guys I backed the winner - hilarious
Easier to hide if your chairman doesn’t become involved in the politics of another business with the governments in question
https://www.thestandard.com.hk/section-news/section/2/219723/HSBC-warns-ban-on-Huawei-by-UK-could-trigger-reprisals
https://edition.cnn.com/2020/06/10/business/hsbc-china-national-security-law-intl-hnk/index.html
As shared a week ago, the media now digesting.............place your bets
‘If people started to exclusively hold cash with the country's central bank, the Fed and other central banks could end up becoming a "deposit monopolist," attracting deposits away from the commercial banking sector.‘
Surely that is doomsday for HSBC as opposed to be sitting on the right side of the fence ? Big Chinese banks already have state ownership/intervention, do HSBC shareholders in West want that scenario ? The alleged global strength that has been cited here may come under strain with this scenario also I’d suggest, it may alter the complete landscape ? Yet another uncertainty thrown into the HSBC mix for me
Not at all, I have repeatedly shared I have no shares in HSBC. Market down at present, as are the shares, reverse of gains seen. All I have sought to express is look beyond usual influences on this one, they are right at centre of global debate.
How dare I question the genius ? ?? In having pointed out the range of additional risks needing consideration, it’s obvious only positives wanted by some. Thankfully for them the market, not HSBC, has provided this for the clever one to proclaim himself. It is an exceedingly poorly run bank, could still very much get caught in political crossfire outside of it’s control. If the little man is making money from any share I’m happy with that, just be fully aware the risks are entering a new phase, good luck to all
Little to brag over, and childish, when gains are market led, particularly when compared to the other major HK stock I have posted on this site about, Prudential. By comparison their rebound has been off the scale, we’ve learnt nothing about HSBC this week bar it is being bought up by index funds in all likelihood alongside all others and enjoying the tailwind of matters outside their control. How they fare as a business moving forwards is another matter, multiple reasons why previously shared as a knowledgeable perspective close to the truth of the situation. Big decisions for their future ? UK to remain as HQ, looks unlikely as greater AsIa focus will bring even more regulatory issues and that has even more significance with USD license still under DPA, especially with them Jumping into bed with Beijing over new security laws. Watch carefully not just the headlines.
Large unlawful gathering last night but no violent issues of note, seems the virus period has broken the resistance of local public in HK. Strong markets led by US have pushed HSBC nicely higher, let’s see if the V shaped market recoveries are matched by V shaped economic recoveries - thanks Jim Cramer !!!
I suspect HK is pivotal to a large amount of the other Asian profits also, hence agree they had no choice. Just like had no choice to cooperate with US on Huawei They told Beijing. How significant is their USD licence and will Trump yet deliver a hammer blow ? Before I’m attacked from several angles, I’m unsure of the implications but have been told it’s very significant. The Chinese bank takeover is something I’ve contemplated for them for some time, might again be the only option if HK public turns against them. What future for HQ remaining in UK now ?
I suspect HK is pivotal to a large amount of the other Asian profits also, hence agree they had no choice. Just like had no choice to cooperate with US on Huawei They told Beijing. How significant is their USD licence and will Trump yet deliver a hammer blow ? Before I’m attacked from several angles, I’m unsure of the implications but have been told it’s very significant. The Chinese bank takeover is something I’ve contemplated for them for some time, might again be the only option if HK public turns against them. What future for HQ remaining in UK now ?