Compared with others in the sector, HSBC shares are undervalued and are beginning to tick northwards again.
The bank is still reeling from its troubles with the US mortgage market, but given that has been the subject of a profit warning and audited full-year results since then, the majority of that information should be in the public domain. After a torrent of bad news, HSBC’s shares look very cheap says the Telegraph.
HSBC recently faced allegations of discriminationagainst U.S. military members with HSBC accounts. In fact HSBC wanted the Soldiers and Sailors Civil Relief Act changed to benefit HSBC. Add to that recent reports of a Saudi investor, Maan Al-Sanea, who now owns a significant stake in HSBC. When will HSBC get in tune with Americans? When will HSBC realize HSBC Finance Corporation is the root of many of HSBC’s problems?
Certainly HSBC shares will tumble again, thanks in part to HSBC Finance Corp. Mortgage problems seen thus far are only the tip of the iceberg. But for subprime borrowers already abused by HSBC Finance, a Saudi investor might be all they need to justify walking away from their homes and huge mortgage debt. If Saudi oil continues to hurt at the gas pump it will hurt those struggling to make mortgage payments long before it hurts others. If the borrower was duped or lied to during the closing process, or perceives that they were, sticking HSBC with the home is not far fetched.
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