Amid a progressive loss of faith in financial counters worldwide, two brokerages are predicting HSBC Holdings shares could slide to $120.
ABN Amro Asia yesterday said fair value for the bank had been revised 15.49 per cent lower to $120, citing a rerating of the bank's British operations as the main cause.
'In essence, HSBC's valuations drivers are decoupling from Asia with concerns over a peaking UK credit cycle, possibly [in the] US as well, and escalating risks in its Latin American exposure,' ABN Amro said.
HSBC ended $1 higher yesterday at $148, close to a two-year low.
Vickers Ballas Securities set a $120 to $125 target price in the next six months for the bank, saying loan demand and non-performing loan levels were set to be hit by a slowdown in the British economy.
Vickers, which has a neutral rating on the stock, said that earnings would drop as Asian economies failed to show signs of stabilising.
The house said HSBC was unique among global banks in that its prospects were tied to Hong Kong, in particular the fate of the US dollar peg.
