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.