Questor share tip: Hold HSBC only a foolish investor would exclude it

By Questor Published: 7:05AM GMT 02 March 2010

HSBC Hldgs

HSBC

682p -37.6p

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Questor says Hold

Yesterday"s rather unsatisfactory formula prominence the point. Pre-tax increase at �4.7bn were significantly reduce than the marketplace had expected, whilst impairments, especially associated to the bank"s US Household Finance business, were broadly in line with forecasts. On the alternative hand, the rising markets concentration of the bank, helped energy the indiscriminate promissory note multiplication to a jot down distinction and minimise the bad opening of the personal monetary business, whilst the European commercial operation hold up well in the face of difficult marketplace conditions.

As Stephen Green, chairman, likes to point out, HSBC has remained essential via the complete monetary predicament and at the impulse finds itself in the peculiar on all sides where it is essentially pang from the governments" attempts to column up the tough strike peers, as low seductiveness rates tumble short the consumer lending margins. With quantitative easing programmes commencement to breeze down the bank should do improved in future, however exclusive a full-blown liberation in Asia, the stream share cost offers small upside.

But, this rather misses the point as for at slightest the last dual years, investing in HSBC has had some-more to do with tying downside than seeking for the ultimate expansion stock.

With fears of a stand in drop retrogression still really majority alive, HSBC has far less downside than of majority of the peers should the world"s monetary complement humour an additional shock. Many bank shares might see poor at the moment, compared to the comparatively fully-priced HSBC, but should the misfortune occur it has far less area to tumble than majority of these ostensible bargains.

With a concept promissory note indication that has proven volatile in the face of the misfortune retrogression in some-more than 60 years, usually a ridiculous financier would bar HSBC shares from their portfolio. While not charity the same grade of bearing to the Asian expansion story as the some-more racy, opposition Standard Chartered, or as majority upside as Lloyds and Royal Bank of Scotland, HSBC is not a buy.

However, in Mr Green, arch senior manager Michael Geoghegan, and Global Banking and Markets head Stuart Gulliver, investors can take joy in one of the majority fast and experienced managements teams of any monetary organisation in the world. Mr Gulliver, an increasingly transparent successor strong to Mr Geoghegan, has the marketplace nous to safeguard the bank avoids majority of the traps that held rivals, and is a pledge of fortitude of vital citation well in to the medium-term.

Solid binds do not come majority some-more obviously in the promissory note industry at the impulse than this.