Is HSBC Share Price in Long-term Decline?

In today’s trading session, The HSBC share price has resumed its long-term bearish trend and is down by less than a percentage point. 

InvestingCube's S&R Levels

FTSE100

FTSE100 (7031)

In Profit

STOP

SELL

TP1

7146

TP2

7127

The drop comes amidst a continued struggle with the company’s largest shareholder, who has insistent that HSBC needs to have its own Asia spin-off. According to reports, Ping An Insurance, who happens to be the largest shareholder, has insisted on the issue of HSBC operations in Asia being operated separately from other HSBC divisions. 

However, the move by Ping An has faced pushback from executives, with the latest reports indicating HSBC listed 14 reasons against such a move. One of the reasons given for opposition to Ping An’s proposition was that the transition period could last up to five years. HSBC also expressed concerns about future events that may hinder the company from accessing US dollars, which can negatively impact its operations. 

Besides the continued fight between HSBC’s largest shareholder and its executives, the recent inflation has also affected the company. Today, the inflation rate above 10 per cent in the UK has seen its operating cost rise. Early this month, the company also recorded a pre-tax earnings drop of 15 per cent. Although the company assured investors that the loss was due to a $1.1 billion hit on possible credit losses and they would recover, the losses still affected the HSBC share price. 

HSBC Share Price

Today, with the company resuming its strong bearish trend. I expect the share prices to continue dropping for the next few trading sessions. We are highly likely to see HSBC’s share price drop to trade below the 500p price level. 

Suppose the proposal by Ping An is accepted, or the infighting between executives and the company’s largest shareholders continues. In that case, we are also likely to see the current decline in HSBC share price becoming long-term. In that case, I expect to see HSBC’s share price trading well past the 470p price level. As a result, my bearish analysis will only be invalidated by prices trading above the 560p price level.

HSBC Daily Chart