The Hongkong and Shanghai Banking Corporation was founded in Hong Kong on March 3, 1865, and in Shanghai one month later. In 1980, HSBC acquired 51 per cent of Marine Midland Bank, buying the rest in 1987. HSBC Holdings was established in Britain in 1991 as the parent of The Hongkong and Shanghai Banking Corporation ahead of its purchase of the UK-based Midland Bank and the impending 1997 transfer of sovereignty of Hong Kong from Britain to China.
Stay off HSBC, investors told
Investors should avoid HSBC stocks until their share price falls to about $210, according to Salomon Smith Barney.
HSBC closed yesterday at $241, up $3 on the day.
Salomon warned in a report this week that HSBC had too swiftly closed valuation gaps with its counterparts in the United States after announcing it was seeking a New York listing.
The report, written by analyst Raymond Lee, noted that HSBC would wipe US$2.4 billion from its shareholder funds by adjusting accounts to meet US regulations. That is about HK$6.86 a share.
Based on a price of HK$237, Salomon said HSBC was trading at three times its book value by British accounting regulations but at 3.3 times by US standards.
Salomon said it was maintaining an 'outperform' rating on the bank.