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Hi All,
It is a long while since I have posted on this site, but we are still holding the HSBC shares we were left over twenty years ago!
Which time period do we tend to use to calculate the (annual) dividend yield?
Some will use the tax year, while others will use the calendar year.
Whichever time period we use, surely yield is based on the price paid per share.
We took advantage of the Rights Issue way back in 2009, and still hold those shares, so the yield on them is very good indeed - whichever annual time period is used.
As HSBC reports and declares dividends in US currency, there is the added complication for UK investors of the exchange rates used to distribute the dividends.
HSBC never declares a final dividend - it is always a further interim dividend, so at the annual results it will most likely be a fourth interim dividend, but I make no predictions as to how much that will be.
For this calendar year that has almost ended, we are very happy with the dividends we have received.
All the best for 2024.
Regards,
Steve
Hi "Regardless",
We meet again - I knew that I would soon find you here!
Regards,
Steve
Hi All,
I think a better title to this thread would be:-
"You have to feel for HSBC shareholders!"
This year we have had a "double whammy" - no dividends and a significant drop in the share price!
I was hoping the closing price at the end of May would be the "bottom", but that is obviously not the case!
At this rate, we will soon be seeing the 2009 Rights Issue price!
Will the share price ever recover to where it was at the end of last year (2019)?
If so, how long will it take?
Take care, stay safe and have a good weekend.
Regards,
Steve
When did we last head towards the results, knowing that there would be no dividend?
Previously, there has been considerable buying activity just before results - partly in the hop of some decent announcements, but also to "buy" the dividend, especially when the shares have gone ex-dividend very quickly after the results.
It will be interesting to see if their is any meaningful forward guidance, and any mention of the HQ location being under review (again)!
Although UK-based, HSBC has never been a British Bank, but one of the conditions of the Midland Bank takeover was that it relocated its HQ to the UK, where it has remained ever since!
Somewhere in the balance sheet will be the amount of the cancelled dividend - in excess of US$4bn, but some would have have been taken in new shares (scrips).
By the end of Q3 (i.e. 30 September), there will be a similar amount, which was paid out to shareholders in recent years in July and September!
Will shareholders ever see anything to make up for the lost dividends this year (2020)?
HI All,
Although today's increase in the share price is very welcome, I am not sure how long it will last, especially as there was a significant difference between Friday's closing price and Monday's open.
Is there a clear explanation for that sudden change?
It would be good to see the share price continue to rise, but quite often in the past such "gaps" have been (partially) "filled" by the shre price drifting lower.
It will be interesting to see what happens during the rest of the week.
Regards,
Steve
Hi All,
For anyone (including companies) "BETWEEN A ROCK AND A HARD PLACE" good choices do not exist - it is simply a matter of taking the least worst option.
I am sure many of us have been nursing significant "paper losses" since the beginning of this year, especially after the dividend was cancelled.
So what is now the least worst option?
We could sell and turn those "paper losses" into real losses;
We could buy more shares (funds permitting) to "average down";
We could be patient and hold on for now, hoping for better things to come (timescale unknown)!
Having previously seen significant drops in the share price, followed by a reasonable recovery, I am hopeful that this pattern will again be repeated, especially when some sort of dividends are eventually reinstated.
There is bound to be market - share price and exchange rate - volatility, which presents good short-term trading opportunities for the brave, but that is not for me.
Have a good week.
Regards,
Steve
Hi All,
It has been a (very) long while since I posted on this forum - I have been active elsewhere under a different user name!
I am sure that none of us like the significant dip in the HSBC share price, and the loss of dividends this year, but do we really think this UK-based bank will fail?
Yes, there are bound to be significant challenges ahead, and the interim results are not likely to be particularly exciting, but having already held these shares since early 2001, we intend to continue to hold.
With all three of the very senior management positions having changed hands fairly recently - Group Chairman, CEO and CFO, they must now be given time to prove what they are really capable of.
It is interesting that both the most senior non-executive director, and the previous CFO (who supposedly "retired" from HSBC) have joined GSK as Non Executive Chairman and CFO respectively.
Although the loss of the dividend has delayed our plans by at least a year, we were not relying on the income - in fact we have taken the bulk of recent dividends in scrips.
Patience is a virtue,
Which very few posses:
I know I have so little,
But some have even less!
Take care, keep safe, and enjoy life as much as possible.
Regards,
Steve
Hi All,
Taken in isolation, this year has clearly not been good for many UK shareholders, including those continuing to hold banking sector stocks.
The FTSE 100 has fallen from over 7600 to 6728, and HSBC shares have slipped from 766.90 to 646.90.
Even though we have taken most of this year’s HSBC dividend in scrips, we are still showing a “paper” loss of over 11%!
Last year was a much better year, with HSBC shares rising from 656.90 (at the end of 2016), to 766.90, and by taking a mixture of cash and scrips, the value of our holding rose by over 22.5%.
Although the share price at the end of this year is below what it was at the end of 2016, the value of our holding has still increased by just over 8.75% during that time - just by taking scrips, when appropriate.
Although we would much rather see a better share price, there are a couple of positives we can take from this year:-
Firstly, we have continued to “average down” the US$ share price overall (to below $10), and secondly, with the dividend declared in early October, we even managed to “average down” slightly further overall in sterling terms - just by taking scrips.
As with the previous few years, the shares have ended the year slightly higher than they were at the end of October.
We are still hopeful that the shares will recover during 2019 and beyond, and it will be interesting to see what happens to the rest of the banking sector, and other financials, as we head towards the major reporting season (annual results).
Happy New Year,
Steve
Hi Fird,
It would certainly be very interesting to know how much HSBC has spent in total on buy-backs, including all costs - I have never seen that information published, nor indeed the exchange rates used to convert the London sterling price to US $.
Were the old days really that good? There were things I liked (and miss) about the past, but overall, I prefer living as we do now!
I believe that before a company buys back any shares, or offers scrips, shareholder approval is required, and HSBC tend to do this using (special) resolutions at the AGM - not that I have ever attended or even voted (in proxy), nor do I intend to do so anytime soon.
Also, companies do not enter the market directly, even if they have their own dealing service - instead they normally appoint some well-known company to act on their behalf.
The daily/total volume of shares involved may appear large, but it is a relatively small proportion of the twenty billion or so HSBC shares in circulation, and most of the individual transactions are quite small - sometimes even as low as just a single share!
The first buy-back, which resulted in over 325 million shares being held in Treasury, cost less than 606p per share (excluding fees).
With the other buy-backs, the shares have been cancelled, and with the generous dividends in force, a substantial amount of dividend payouts will be saved - especially after a few years.
Although taking scrips is a convenient way to "save", it is not always painless, especially when the share price in the open market dips substantially below the scrip price.
This year has not been good for HSBC (or the rest of the UK based banking sector), and having taken some scrips for all the dividends last year and this, I am currently nursing a small "paper loss" in respect of most of those shares (not that it is very many/much).
I am hopeful that the share price will rise, and if the last three years are anything to go by, the share price increased between the end of October and the end of December.
Also because of less favourable exchange rates this year compared to last, my total HSBC dividend income will be marginally down this year, even though I now hold about 9% more shares than I did at the start of 2017!!!
It will be interesting to see what happens to the share price and exchange rates as we head towards the Annual results.
Have a good weekend.
Regards,
Steve
Hi Fird,
Although in some ways it does seem "crazy" that HSBC buys back shares on the one hand and issues scrips on the other, we need to consider that buy-backs are a much more recent activity.
HSBC have been offering scrip dividends for a long while now - well before I first held shares in early 2001, and have continued to offer them ever since.
For those of us who are long-term shareholders, it is a very good way of gradually increasing the number of shares held without paying any dealing fees or stamp duty.
I see from the announcement today that over 85.7 million scrips will be issued next week, which is more than four times the number issued last time.
For the last five quarters, the scrip take-up has been very low, ranging between about 9 and 12%, but this time it will be over 35%.
Personally, I hope the scrip option continues for some while, but I would also be quite happy to see further buy-backs announced to keep a lid on the total number of shares in circulation.
Regards,
Steve
Hi daltry,
Clearly it has not been a good year for the banking sector, and the further dip today is also very disappointing.
So much for the share buy-backs, which have cost on average about 672p per share, with the one carried out this year costing almost 719p per share (average price)!!!
Perhaps the first (larger) one in 2016 was worthwhile with an average cost of about 606p per share!
At least the 3rd quarter earnings release helped slightly, and the shares have ended the day today at exactly the same level as they were at the "close of play" on the day the results were announced.
I am very aware that once any shares dip in double digit percentage terms, a significantly greater percentage increase is required from the low price to bring them back to the former level:-
a 20% drop requires a 25% increase;
a 25% drop requires a 33.33% increase;
a 33.33% drop requires a 50% increase, and
a 50% drop requires a 100% increase!!!
With the three most senior group management positions (Chairman, Chief Executive and Finance Director) changing within a relatively short time, we need to be patient to let them really prove themselves and see if the "new" strategy achieves the expected results.
At least we receive good dividends, even if some of us have re-invested a considerable amount of that in scrips!
Hopefully we will see the share price improve in the coming weeks, month, years, and in the meantime enjoy the good dividends.
Have a good weekend.
Regards,
Steve
Hi All,
For those of us who like to re-invest part/all of our HSBC dividends in new shares (scrips), without any dealing costs/stamp duty, it certainly makes a pleasant change to see the end of day share price on the final day of scrip election above the scrip price!
As the dividend was announced almost a month before the decent 3rd quarter earnings release, and coincided with a general dip/correction in world stock markets, those of us taking scrips appear to be well rewarded at this point in time.
Although the scrip option was available several days in advance of the 3rd quarter results, we waited until then to opt for as many new shares as possible, and take the small remaining amount in cash.
The exchange rate keeps fluctuating, but I see that the cable rate is now above 1.31 again, so it will be interesting to see what the actual cash dividend exchange rate will be on Monday.
The share price is still rather low, but I am hopeful it will continue to rise (albeit with the normal market fluctuations), before the end of the year, and indeed before the Annual Results are announced on 19th February.
As this discussion seems rather quiet at the moment, I hope all is well with everyone who normally frequently posts here.
Regards,
Steve
Hi All,
It has been some while since I posted on this site, but I expect the events of the last few days have been of concern to us all.
Obviously any “correction” is painful at the time, but many (including some influential bodies) have been suggesting that such an event was long overdue, so it hardly came as a “shock”.
What we still do not know, is:-
How severe/prolonged it may be;
If/when any recovery might commence;
How long it will take to return to previous levels;
How others will respond.
Clearly, some will sell part/all of their holdings to “cut their losses” and I expect that numerous “stop loss orders” have already been placed/taken effect.
Others, however, will see this as an opportunity to top-up, “average down”, obtain a better yield, and perhaps some "buy limit orders" have already been placed/actioned.
Those that “panic” and sell off their holdings just compound the problem in the short-term, but once the “timid” have sold off all/most of their holdings, the “brave” move in and push things in the other direction.
Having held HSBC shares continuously since early 2001, I have seen plenty of peaks and troughs, and it is certainly my intention to ride out this storm.
For those of us who like to take advantage of scrip dividends, if there has to be a dip, then the timing of it could hardly be better!
The shares went ex-dividend yesterday, which was also the first day which influences the new scrip price.
By next Wednesday evening, when the sterling scrip price is fixed (and the US dollar price is likely to be announced the following day), we should have a better idea of the nature of this “correction”.
It may well be wise to await the third quarter update, and indeed the UK budget (which I believe happen on the same day), before finally deciding whether or not to take scrips, and if so, how many.
If dividends are maintained at current levels, then the income stream will not be affected, even if the “book” value has been hit, resulting in (temporary) “paper” losses.
Some investors primarily seek capital growth, whereas others invest mainly for good dividend yields.
Perhaps some of us are "greedy" and would like to see both capital growth and good dividend yield/income!
HSBC has a policy of paying three equal interim dividends (currently 10c), with a variable fourth dividend, and the sterling value of those dividends varies considerably with exchange rate movements - even the effective rate for the scrips and the cash exchange rate for the same dividend sometimes vary quite considerable, because they are set on different dates, and one never knows the cash exchange rate until after the deadline for choosing the scrip option!
All the best with your investment decisions, and have a good weekend.
Regards,
Steve
Hi All,
FIRSTLY THE BAD NEWS:
We are two thirds of the way through the year, and the shares (in London) are down 98p, which is 12.78%!!!
I thought things were improving last month, but the shares have fallen from 730.5p to 668.9 this month - a drop of 61.6p, which is 8.43%!!!
The FTSE 100 has not performed well of late.
NOW THE GOOD NEWS::
Is there any?
Perhaps, by way of consolation, HSBC is not the only UK based bank out of favour at the moment - Barclays, Lloyds, Royal Bank of Scotland and Standard Chartered are also close to their 52 week low share price.
HSBC pays good dividends, and with the current price/exchange rate, the yield must be well over 5%.
QUESTIONS:
Is this downward trend likely to continue - perhaps up to another 49p for the remaining third of the year?
How are the “real” lenders likely to be affected by the Wonga problem?
Who is brave enough to buy in at these levels?
Will those who have paper losses of more than a given percentage be tempted to sell - to prevent even bigger paper losses?
How long will it take to recover firstly to 700p, then where we were at the end of last month - or even the start of the year (766.9p)?
I wonder what percentage of possible scrips will be issued this time round???!!!
.
Have a good weekend.
Regards,
Steve
Hi johnson36,
Whenever HSBC declares a dividend, it is always in US $ (cents), and when the shares go ex-dividend, the scrip price is fixed, based on the average of the closing London prices for the first five working days. The exchange rate used for determining the "real" dollar price is based on the price at about 11.00am on the fifth working day, so we now have the scrip price confirmed at £6.9574 and US $ 8.9716, which equates to an exchange rate of 1.2895.
For those taking scrips (and I expect I will take some again this time), the decision has to be made a few days before the cash exchange rate is announced!
For this dividend, the scrip election must be received by the Registrar by 13th September, and the cash dividend will be based on the forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 17th September.
Regards,
Steve
Hi All,
I calculate the new scrip price to be 695.74p, and with the appropriate exchange rate hovering around 1.29 for most of the day, the “real” price is likely to be very close to US $9 per share.
I expect we will know the exact amount very soon - possibly as early as tomorrow.
Regards,
Steve
Hi All,
Following the announcement earlier today confirming the date of Iain MacKay's retirement, and Ewen Stevenson's appointment as the new Group Finance Director, I believe that we need to give the new top team a chance to implement their "new" strategy, and grow the business.
I do not expect any quick fixes, and it may take time for the share price to recover to where it was earlier this year.
With both the Chairman and Group Finance Director coming from outside HSBC, with a wealth of experience elsewhere, they should be able to be a significant positive influence on this "big beast".
The Interim Results announced yesterday were reasonable, and as the Strategy Update was only announced less than three weeks before the end of the reporting period, more time is needed.
I suppose any results are only a snapshot in time, and as with most large companies, HSBC results are nearly always at least a month out of date when they are announced.
As I intend to hold for the long term, I am content to see what progress is made during 2019, and hope to see much better full year results announced (most likely in February 2020) for that period.
In the meantime I will enjoy receiving the dividends, even if I do continue to take some of it in scrips, and I see that we now have the dividend timetable for not only the dividend announced yesterday, but for the next two dividends.
I am not too concerned about the Trade War(s), or even BREXIT, but obviously both will have some impact on many companies in various countries.
I have already held HSBC shares continuously since early 2001, and have seen many peaks and troughs in the share price, but hopefully there will be a bit more stability and some growth as we move forward with the new top management in place.
Regards,
Steve
Hi driftking27,
The share price quite often rises in anticipation of results being announced, but sometimes it quickly dips back again after that!
Last year the share price certainly increased prior to the Interim (Q2) Results, and remained buoyant for a while, even when the shares went ex-dividend, but virtually as soon as the scrip price had been set, it fell back again.
I am still nursing a small paper loss on the few scrips I took for the dividend declared when last year's Interim Results were announced, but I took a much larger proportion of the dividend in cash than I often do.
It will be very interesting to see what happens this year, and how expensive the next lot of scrips are.
I would certainly like to see the share price advance a bit more before the end of the year.
Regards,
Steve
Hi mishmos,
I am still quite happy to hold at these levels, and have recently topped up slightly - by taking some scrips instead of just cash dividends.
I certainly have no intention of putting any "new money" into HSBC, and do not expect to see the highs of the early 2000's, when there were far fewer shares in circulation, and the dividend payments were considerably more generous.
It seems that the main purpose of the buy-backs is to keep a lid on the number of shares in issue - in fact at the recent Strategy Update we were informed that the main purpose of the buybacks is "to neutralise any share issuance as a result of scrip dividends."
There are still plenty of uncertainties out there - what with Trade Wars and Brexit problems, but the very recent general consensus among 20+ serious analysts is to hold HSBC.
Regards,
Steve
Hi All,
The very nature of stock markets, and indeed individual equities, is that they rise and fall - sometimes quite suddenly, for no (or little) obvious reason.
The first half of this year has been quite disappointing as far as HSBC is concerned - down over 7% since the end of December 2017.
Even the fairly high volumes of buy-backs during recent days, have not prevented the share price slipping below where it was at the end of June last year.
The buy-back must now be over 50% complete, but assuming they spend all the US$ 2 billion, and the price and exchange rates do not change too much, then about a further 80 million shares are likely to be purchased.
At least (so far) they are managing to buy-back shares this time for a lower cost (in sterling terms) than the previous one, and it is good to see that the number of shares in circulation (excluding those held in Treasury) is now below 20 billion, despite over 21 million new scrips being issued today, but the take-up was very low again this time at less than 11%.
As you know, I am here for the long-term and tend to take a mixture of cash and scrips each quarter, and although I am now nursing a paper loss on this and the previous three scrip issues, I am still up overall.
I believe that we need to give the new senior management (and that will soon include a new Group Finance Director) time to make a difference - possibly until the 2019 full year results are announced in early 2020!
It seems to me that some people watch the markets with the same "edge of seat" nervousness that some people experienced during the recent Penalty Shoot Out!
Just think how long it has taken for England to reach this stage again in the World Cup, and it seems that the UK Banking sector has not yet fully recovered from the 2008 financial crisis.
I would love to see the HSBC share price back to where it was in early 2001, when I sold a few shares for over £10 each.
But of course, the flip side is that in 2009, I fully subscribed to the Rights Issue, acquiring more shares for as little as £2-54 each!
I enjoy receiving the regular dividends, which have amounted to nearly US$ 10 per share on the first block I owned/retained in early 2001, and over US$ 4 since the Rights Issue, which were allocated at US $ 3-61 per share!
Let us be patient, and hope that things will improve in due course.
Regards,
Steve