HSBC Holdings' share price plunged to a five-year low in Hong Kong yesterday after Morgan Stanley cut its forecast for the bank's earnings and dropped its target price for the stock by 25 per cent. The stock dropped 12.52 per cent to end the day at HK$88, the first time it has closed below HK$100 since September 2003, when the severe acute respiratory syndrome epidemic hit earnings. Shares of Standard Chartered Bank also hit a five-year low, closing down 13.47 per cent at HK$105.40. Hang Seng Bank fell 8.72 per cent to HK$89.50. Morgan Stanley cut its target price for HSBC to HK$75 from HK$100, and warned of weaker revenue from Hong Kong and the rest of Asia, and an increase in its bad debts. 'We question how long HSBC shares can continue to tread water in the face of falling earnings and increased pressure on capital,' Morgan Stanley said, adding that HSBC might halve its dividend next year. Ivan Li, an analyst at Kim Eng Securities in Hong Kong, said it was too early to say whether HSBC would cut its dividend, but agreed the business outlook was uncertain. Louis Tse Ming-kwong, a director at Hong Kong brokers VC, said HSBC's share price would remain under pressure since emerging markets account for a big share of its income. Still, he said Standard Chartered would suffer most from a downturn in emerging markets since it was most dependent on them for its profits. Morgan Stanley cut its target price for Standard Chartered shares by half.