Asia-focused bank HSBC (HSBC) has been hit by yet more bad news, this time in the shape of money laundering allegations. The shares have fallen in response. That is set against a general backdrop of share price decline for the name, which may continue as the economy deteriorates further. However, at this stage, I expect the shares to bottom and start a recovery. While I do not like the company as an investment option, for readers who are eyeing it, I think it is worth calling out that the shares likely will bottom in the coming six months, so if one is trying to time the market, it will reward paying close attention.
The Latest Problem for HSBC
The bank operates in a variety of complex markets across many jurisdictions on a big scale, so it is not surprising that like many of its peers, it does from time to time encounter significant challenges. The latest is money laundering allegations which have been levelled against several banks, including HSBC.
That drove the share price down in London trading on Monday – a day on which there was a broad based selloff – by 5%, to stand at 288p. During the day, it touched lows just beneath 285p. That is a quarter-century low for the stock and represents a 9.9% decline even since earlier this month, when my Seeking Alpha piece HSBC Could Still Go Lower From Here was published.