Introduction This report aimsto analyse HSBC’s share prices. It will be about the six months period 27 July2016 until 31 December 2016.
For this report, I have made use of Yahoo.com,HSBC’s interim and annual reports of 2016 and CNBC’s price analysis. Share analysisOn July 20,2016, the current and former head of global foreign exchange cash trading werecharged with conspiracy to defraud a client. After that moment, HSBC’s shareprice reached its almost lowest point at £438.
00. After this,HSBC tried to recover the share price by introducing their new strategicobjectives within the interim report. Firstly, they introduced their cost-savingmanagement which caused a 4% decrease in expenses. Secondly, they reduced theirrisk-weighted assets, which increased their common equity ratio from 11.9% to13.6%, within six months.
This encouraged investments once again, leading tothe slow rise of HSBC’s share price. Despite fluctuations,there was a steadily increasing trend. Then on August 3, HSBC announced their sharebuy-back of $2.5 billion. This was possible due to the successful sale of the HSBCBank in Brazil. The announcement mentioned that it would benefit allshareholders. It also portrayed the firmness and flexibility of HSBS’s balancesheet. This caused for a shoot up in the share price.
The trend experienced asudden increase of 19% within 5 days, the shareprice rose from £482.20 to £537. This upward trend continued for four months, until 6 December,when there was another significant increase in the share price. Within only 2days, the share price went from £626.
70 to £679.60, a growth of almost 10%. Theupsurge was a result of HSBC maintaining their annual dividend of $0.51. Fromthen on, the share price has remained somewhat constant, with a few downward fluctuations.Future Prediction HSBC’s share price on December 2016 was £656.90.
The annual report of 2016 described HSBC’s significantinvestments in technology, focused on increasing cost efficiency. It alsohighlighted the company’s increased market share. Thus, this leads to the believethat the share price trend will only improve more than it already has in 2017.