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HSBC Shares (0005) and 10% Dividend Yield

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  1. #11

    It really does depend on your starting point. Investors who purchased in 2016 when the share price was below $60 (for a while below $50) have enjoyed not only good dividends but a modest capital gain - annualised returns around 10% pa (+/- depending on your exact purchase price). People who purchased at higher prices would have done less well.

    At 6.2% I'm a happy holder - noting the strength of the balance sheet (they have been returning excess capital through buy-backs in recent years) which suggests that the current dividend could be maintained in a modest downturn. I also note that post-results, Macquarie has downgrade HSBC to underperform with a $57.20 target.


  2. #12

    Join Date
    Feb 2019
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    Are dividends on Hong Kong Stock exchange listed HSBC shares taxed in Hong Kong? Assume not?


  3. #13

    Join Date
    Nov 2014
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    458

    HSBC seems it might have difficulty in maintaining its dividend going forward as its payout ratio is around 80% I believe. Given that global growth is expected to slow, I'm guessing people suspect HSBC reduce their dividend if there is a global recession.


  4. #14
    Quote Originally Posted by dotslave:
    Are dividends on Hong Kong Stock exchange listed HSBC shares taxed in Hong Kong? Assume not?
    Unless you are buying as part of a business activity, Hong Kong does not tax dividends.

  5. #15

    Join Date
    Sep 2015
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    For some dramatic action, watch at 1:00

    https://www.youtube.com/watch?v=i7UFREZLIV0

    Well-known Hong Kong stock commentator Agnes Wu Mang-ching, pictured far right, burst into tears during a live Cable TV broadcast the moment that HSBC closed at HK$33.

    shri, civil_servant, bdw and 1 others like this.

  6. #16
    Quote Originally Posted by Hkemail888:
    For some dramatic action, watch at 1:00

    https://www.youtube.com/watch?v=i7UFREZLIV0

    Well-known Hong Kong stock commentator Agnes Wu Mang-ching, pictured far right, burst into tears during a live Cable TV broadcast the moment that HSBC closed at HK$33.
    That would have been a great "buy" signal.

  7. #17

    In Dublin in 2010 as a fresh grad I saw a lot of people around me absolutely wiped out having 'invested' in Irish bank shares in the lead up to the GFC. Maybe I'm traumatised from those dark days but investing in any individual bank (anywhere) is a risk far greater than what you're paid for in my opinion. Especially in HK when you can get 5 % from nice boring semi-monopoly HK utilities or 2.75% on a USD time deposit.

    jrkob likes this.

  8. #18

    Join Date
    Oct 2006
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    Quote Originally Posted by goodluckduck:
    In Dublin in 2010 as a fresh grad I saw a lot of people around me absolutely wiped out having 'invested' in Irish bank shares in the lead up to the GFC. Maybe I'm traumatised from those dark days but investing in any individual bank (anywhere) is a risk far greater than what you're paid for in my opinion. Especially in HK when you can get 5 % from nice boring semi-monopoly HK utilities or 2.75% on a USD time deposit.
    This. Its all about diversifying. If you don't know what you are doing or more importantly don't have the time to do the research, you are better off just investing in a global ETF.
    traineeinvestor likes this.

  9. #19
    Quote Originally Posted by goodluckduck:
    In Dublin in 2010 as a fresh grad I saw a lot of people around me absolutely wiped out having 'invested' in Irish bank shares in the lead up to the GFC. Maybe I'm traumatised from those dark days but investing in any individual bank (anywhere) is a risk far greater than what you're paid for in my opinion. Especially in HK when you can get 5 % from nice boring semi-monopoly HK utilities or 2.75% on a USD time deposit.
    I certainly understand where you are coming from with this.

    That said, the banks we are taking about today are far more robust than they were back in 2009 - higher regulatory capital, more rigorous lending criteria, less exposure to high risk business activities. They'll take a hit (as will most businesses) during the next downturn but I don't see them going to the wall.

    In any event, as pin says, one of the keys to risk management is diversification.

  10. #20
    Original Post Deleted
    Equity is about 8.4% of total liabilities per latest numbers on AAStocks (and slightly better than that if one adjusts for the minority interests).

    This is about average for a large bank with a diverse portfolio of assets and diverse funding sources. If we compare with the likes of Lehman Brothers and Bear Sterns pre-GFC, equity ratios were well below 4% - a huge difference - and, worse, both those companies were too dependent on short term funding and had a liquidity mismatch between their assets and liabilities - making them extrmely vulnerable to any disruption to normal operating conditions. HSBC doesn't have these problems.

    I'm not disagreeing with you that, like all banks, HSBC is highly leveraged (it is), only pointing out that comparisons with some of the institutions which failed during the GFC are questionable. As both a happy customer and a happy shareholder, I certainly hope they are!