HSBC is heading for its biggest weekly share advance in more than four years following optimism that the bank can recover on its earnings.
Since 1 October the bank’s shares have risen by 6.3%, in stark contrast to the position of fourth-worst performer on the Hang Seng Index it held over the last year.
Europe’s biggest bank has suffered as a result of the sub-prime crisis and the bank’s strategy has faced an overhaul but analysts are optimistic that it can turn its fortunes around.
“HSBC is one of the bluest of the blue chips, it’s got a good global franchise and its multiples are inexpensive,” says Leslie Phang, speaking to Bloomberg, who works for Commonwealth Private Bank in Singapore.
HSBC announced a rise of 25% in first half profits in July, above estimates following investment gains in China helped the bank to overcome rising costs from sub-prime mortgage loans in the US, according to reports from Bloomberg.