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Have to agree with rugs, 5 profit warnings in 15 months! Bad news keeps coming since the acquiistion of Aeroflex which cobham overpaid for. This has been a bad luck share for me over the years and tainted now. was tempted to jump in but cant see a short term rise personally.
Intersting point here from posts earlier in the year.... think back to the start of the year when people were concerned about china domestic demand and markets were in panic, overnight Exports fell by 4.4% as well as imports dropping by 12.5 % so with both being so negative is a much worse picture when the FTSE was at 5500. HSBC was getting caned, but data is now worse from Asia and share price is soaring. Its just not making sense to me, what am i missing, or are the markets just bored of that old story? my 600p sell level is looking closer....
As you say poker, the share buyback is just a measure to prop up the share price which would hav dived, but in the current climate there is not anything banks can do. BUT here is my concern. Things are only getting worse, NIR / ZIR are here for a long time yet and looking at EU banks we are only a fraction away from a banking and or EU crisis. Its only the crazy QE and CBs that are keeping the plates spinning at present.
Karu, from what I keep reading is that most analysts and people do not expect the divi to be held which is why i thought the share price kept diving pre bexit. Dividend cover is so low now, unless things pick up it will have to be cut, but would still give a good % return I guess it depends wht timescale we are talking.
I think generally you have the option of tender (at a pemium) or open market, which is more common at which point the bank will state when they will start to repurchas shares, but can only purchase a certain % a day which can drag on for some time
SUF admits times are tough - you read it here first...... Seriously speaking i think people like yourself, long term holders are well off but as other people have said you can only keep cutting and selling for so long...... Im an accountant and results like these back in my day would have caused mayhem. But we are not in those days anymore. Luckily share prices these days have little to do with performance of companies now and more to do with CBs.
In the last few years the share price and the results seem to be in reverse. For many years they posted some very promising results and share pric always went down. This is one of the poorest i have seen and share price goes up. Apart from the share buyback not much to cheer. ROE has dropped from 10.6 to 7.4. On the call gulliver said to try and achieve the 10% he will cut more costs. How much more can you cut?
If you look at the results though fish, the inteesting part is that europe profit did reasonaby well YoY and HoH compared to Asia, which really dropped off. Makes you wonder if weare seeing the true picture in Asia (as you say could be a big concern). Would like to know the detail behind the geographical P&L breakdown - if i get time I might look at the full 16 pager..... zzzzzzz
Hereshopin, Totally agree with you. HSBC are shrinking at such a rate... 87 k job cutsin last few years and lost 80 million customers. But they have had to do this to concentrate on profit. As you say normally after the initial buyback is. announced it pulls back (just like the reverse of a dividend payment)
Jack, why were they mixed results? I thught they were bloody poor and the concerning part for me is that I always treated HSBC as the solid bank, so when HSBC struggle then other banks will struggle more. An interesting point digging into the geographical reakdown is that income from asia and europe is about 50/50 but 85% of the profits come from Asia. (better then it used to be as europe used to make a loss) I guess this shows Asia is heavily slowing down. Also commentary from HSBC is normally very upbeat but this time they say "reasonable" and due to the climate cant maintain 10% return etc, all paints a negative future, a bit like other banks have I guess. Overall not a good time for banking sector.
Heres hopin, I think the share buy back is just balancing the balance sheet as they keep flogging parts of the business (brazil this time), so need to rein in the capital side of the balance sheet really and the share buy back is only half of the sale price of the brazil business. ($5.2bn)
I think a share buy back has saved the day here.... Very poor results, a bit worse than i thought , but a share buy back will push shares up. Cant keep divi at these levels on these results as they will run out of parts of the business to sell.
Jack dawson, the SP is up relative to the banking sector today. EU banks getting slaughtered commerzbank 8% down and Deutsche down 4% most UK banks - 3% and HSBC holding up well at 1% down presumably as people hold for results. Will be interesting to see how they have done and forward looking statements