HSBC share price retreats amid China woes: is it a buy?

The HSBC (LON: HSBA) share price has been in a slow recovery mode in the past few weeks. It rose to a high of 493p last week, up from the year-to-date low of 435p. The stock remains about 12% below the highest level this year.

China concerns remain

HSBC is a leading global banking group that has a presence in tens of countries globally and trillions of dollars in assets. The firm makes most of its money in Hong Kong and it aims to become a leading player in mainland China.

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One of the biggest bank news this year has been the war of words between HSBC and Ping An, its biggest shareholder. Ping An, a leading Chinese insurance company, has called for HSBC to break its business into two, as I wrote in this report.

On paper, the concept of breaking HSBC seems like a good one. It would allow its Chinese business to operate independently from its European business. Further, it would be a way of achieving robust shareholder returns by boosting its focus.

In reality, however, breaking the bank would be complicated and expensive because of the scale of the company.

Meanwhile, HSBC share price has been under pressure because of the ongoing challenges in China’s economy. The second-biggest economy in the world has been troubled because of the ongoing Covid-19 lockdowns.

HSBC published relatively mixed results in October. Its reported profit after tax declined by $1.7 billion in the third quarter of this year. Its reported profit before tax fell to $3.1 billion as its revenue fell by 3% to $11.6 billion because of impairment charges of its French business. Net interest margin increased because of the rising interest rates.

HSBC share price has a high possibility of continuing rising as the company continues its restructuring. It is shedding about 4,000 jobs in its key countries in a bid to boost its profitability. Also, it will likely continue rising as the Hong Kong economy rebounds.

HSBC share price forecast

HSBC share price

HSBC chart by TradingView

The four-hour chart shows that the HSBC stock price has been in a strong bullish trend in the past few weeks. It rose to the key resistance level at the 50% Fibonacci Retracement level. In this period, the shares have moved above the 50-period moving average. It has also moved above the ascending trendline shown in yellow.

Therefore, the stock will likely continue rising as buyers target the key psychological level of 500. A move above that level will be a bullish sign for the stock.

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Source: https://invezz.com/news/2022/11/28/hsbc-share-price-retreats-amid-china-woes-is-it-a-buy/