BRITAIN’S biggest company, HSBC, is continuing to attract fans even though the shares have soared by almost 50% this year.
Today the price dipped 11p to 900p – which compares with its low of 631p in February – where the company now boasts a price tag of almost 100 billion.
Two big brokers have upgraded their recommendations. US securities house Lehman Brothers moved from equal weight to overweight, raising its 12-month target price from 825p to 975p. Merrill Lynch upgraded the shares to an outright buy with a target price of 1013p.
HSBC has expanded rapidly of late with a series of major acquisitions. Just a couple of weeks back it agreed to pay $1.3 billion (776 million) for Bank of Bermuda, and earlier this year bought Household Finance Corporation.
Lehman says it upgraded the shares after making bigger assumptions of the contribution from Hong Kong, where the bank has extensive interests, and the benefits likely from the Household acquisition. But while the main banking division continues to fire on all cylinders, there are concerns about the investment banking division where HSBC is reckoned to have laid off a further 90 City workers last week.
Share prices generally opened lower, on profittakingand falls for the Dow in New York on Friday. Of the top 100 companies only 16 were trading higher. In thin conditions, the FTSE 100 fell 27 points to 4349.9.
British Airways failed to impress the City after showing a drop in interim pre-tax profits of 80% to 60 million. The carrier is in line to make another loss for the full year. The shares dipped 1/2p to 2231/2p.
Hedge fund firm Man Group fell 5p to 1465p as investors continued to reflect upon last week’s interim profits. The fall in the price also discounted a move by Lehman Brothers to raise its target price from 1660p to 1850p. Lehman said it had revised its forecast to reflect a slower rate of decline in revenue margins. Man Group’s first-half profits from its asset management and brokerage operations were ahead of Lehman estimates by 2%.
Revenue margins were better than expected in the asset management division, with fee rates notably improved on new business.
Bid speculation helped drive Psion 53/4p higher to 811/4p, making it the best performer among second liners. There is talk that Psion may soon find itself on the receiving end of a bid from Finnish mobile phone giant Nokia.
Word is Nokia wants to make the move in order to gain complete control of Symbian, a mobile operating system joint venture in which Psion and Nokia have the biggest stakes.
Brokers say Nokia needs to make the move in order to fend off Microsoft’s big push into the mobile phone market.
Engineer Tomkins firmed 11/2p to 290p. Broker UBS remains neutral on the shares but has raised its target price from 255p to 300p.
AIM-listed Charlton Athletic continued to trade at a year’s low despite Saturday’s 3-1 win over Premiership rival Fulham. The win moved Charlton into fourth place in the league, bringing the possibility of European football for fans at The Valley next season. It was the first day of trading on AIM for Clapham House Group.
The shares brief ly touched 1201/2p before settling at 1151/2p.
