- CFO purchases are followed by $0.5m share purchase by non-exec
- Director dealings follow improving sentiment toward the bank
In the past month, the share price of HSBC (HSBA) has changed trajectory. At 335p, the stock is now up 19 per cent on September's multi-decade low, compared to a rise of less than 2 per cent for Asia-focused rival Standard Chartered (STAN).
Talk of a recovery is probably a bit rich, given the lender’s market value is up from just 0.37 to 0.44 times’ net assets. Indeed, the 43 per cent drop in the stock this year spells out the broader disaster for shareholders.
But sentiment has nonetheless improved. Falling impairments, rising capital levels, and an improving economic outlook meant third-quarter results were better than many had expected at the start of the period.
The reliance on Hong Kong and Greater China – which until recently seemed a geopolitical millstone around the neck – now looks like an asset. Asia accounted for all the group-level profits in the period, and should help the bid to re-commence dividends.
Closer to home, a warning around looming possible charges for UK current accounts generated headlines, but high street peers NatWest and Lloyds look more exposed to the threat of negative rates.
Against this backdrop, it was no surprise to see chief financial officer Ewen Stevenson acquire £118,746-worth of ordinary shares this week. He was followed by non-executive director James Forese, who spent $482,466 (£373,718) on American Depository Shares, each of which is worth five ordinary shares.
After all, the rating still looks cheap for a bank focused on geographies which are better equipped to contain the pandemic and offer a great return on equity. Still, we are minded to agree with the stock’s analysts, just a fifth of whom rate the shares a ‘buy’, according to FactSet. The next spike of geopolitical worries is likely to arrest the momentum. Hold.
Last IC View: Hold, 319p, 27 Oct 2020
| Buys | |||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) | Comments |
| Aston Martin | Lawrence Stroll (ch) | 27 Oct 20 | 50 | 20,000,000 | Purchased by PCA in placing |
| Abbey | Charles Gallagher (ch) | 30 Oct 20 | 1,575 | 2,756,250 | Purchased by PCA |
| HSBC | James Forese | 29 Oct 20 | 16.25 | 373,718 | Converted from US$. American depositary shares |
| InnovaDerma | Mark Ward | 28 Oct 20 | 69.5 | 269,672 | |
| Abbey | Charles Gallagher (ch) | 2 Nov 20 | 1,575 | 236,250 | Purchased by PCA |
| HSBC | Ewen Stevenson (cfo) | 28 Oct 20 | 320.9 | 118,746 | |
| City of London Investment Group | Rian Dartnell | 28 Oct 20 | 3,920 | 117,587 | |
| Foxtons | Richard Harris | 29 Oct 20 | 34.3 | 74,122 | |
| Altus Strategies | Steven Poulton (ceo) | 28 Oct 20 | 61.5 | 68,771 | Average price |
| Prudential | Alice Schroeder | 29 Oct 20 | 1,915 | 52,653 | Converted from US$. American depositary receipts |
| Coca Cola European Partners | Peter Brickley | 28 Oct 20 | 2,897 | 50,694 | Converted from US$ |
| Audioboom | Michael Tobin | 29 Oct 20 | 170.9 | 48,486 | Average price |
| Foxtons | Ian Barlow | 29 Oct 20 | 32.8 | 32,800 | |
| Coca Cola European Partners | Victor Rufart | 29 Oct 20 | 2,828 | 28,281 | Converted from € |
| Foxtons | Alan Giles | 29 Oct 20 | 32.7 | 18,758 | |
| Metro Bank | Anne Grim | 27 Oct 20 | 62 | 15,500 |
| Sells | |||||
| Company | Director/PDMR | Date | Price (p) | Aggregate value (£) | Comments |
| JD Sport | Peter Cowgill (ch) | 30 Oct 20 | 745.6 | 19,291,522 | |
| Aston Martin | Mahmoud Samy Mohamed Aly Elsayed | 29 Oct 20 | 54.6 | 2,048,023 | Sold by PCA |
