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HSBC share price has declined by about 1% in London today as investors react to yesterday’s UK budget. The stock is trading at 430p, which is lower than this week’s high of 435p.
The background: HSBC is the biggest bank in Europe according to its asset size. The company has almost 4,000 branches globally. It also has extensive operations in Asia. In the past year, as shown below, the company’s shares have underperformed their peers like Lloyds, Barclays, and NatWest.
This performance is mostly because of the ongoing risks to its business in Western countries. It has been accused for having senior officers who are members of the Communist Party of China (CCP). It is also being watched closely by Chinese officials because of its Western links. Further, the bank’s American business is struggling and media reports suggest that it is exploring a sale. It has also been caught in the US case against Meng Wanzhou, the CFO of Huawei.
What next: In the past few months, HSBC has been putting more emphasis on its Asian business. In fact, it has already moved some of its high level executives from the UK to Hong Kong. This could be an opportunity because of how fast the region is growing. In fact, its wealth management arm could tap into the thousands of millionaires that are being churned in China every year.
The daily chart shows that the HSBC stock has been on a recovery path. It has already risen by more than 50% from its lowest level on September 25. Also, the stock has formed what looks like an ascending triangle pattern. The uptrend is also supported by the 50-day and 100-day exponential moving averages (EMA).
Therefore, in my view, the stock will continue rising if bulls can manage to clear this month’s high of 450p. If this happens, the shares could climb to even 500p.
