HSBC Share Price Forecast August 2021 – Time to Buy HSBA?

Shares of British multinational investment bank HSBC Holdings (LSE: HSBA) are currently trading around the 410p mark, which is almost 200p less than what it traded over 2 years ago. The shares. Which were already falling before the pandemic experienced a 35% fall in 2020. However, the company’s recent solid half-year results have left investors wondering whether it’s time to pick up HSBA shares.

HSBC Holdings – Technical Analysis

According to the financial statement released by HSBC Holdings, its market cap is £84.054 billion with total assets worth £2.154 trillion. Revenue for 2020 was at £60.56 billion with a profit margin of 5.14% compared to £73.91 billion in 2019.

Moving averages for HSBC Holdings such as Exponential Moving Average (30)(409.23) and Simple Moving Average (30)(405.73) are pointing towards a buy action. However, others such as Exponential Moving Average (200)(416.07) and Simple Moving Average (200) (413.90) are pointing towards a sell action. The majority of oscillators such as Stochastic %K (14, 3, 3)(80.56), Commodity Channel Index (20)(80.77), Average Directional Index (14)(17.41)  and Awesome Oscillator(3.06) are neutral.

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Recent Developments

HSBC Holdings has struggled throughout the pandemic. However, the recent set of results that the company released provided optimism for some investors. Pre-tax profit for the bank increased from $6.5 billion to $10.8 billion compared to the same period in 2020. HSBC Holdings also highlighted how all regions experienced profitability with pre-tax profit up by $4 billion in Q2. This is an indication of a strong comeback following the pandemic which should carry through the rest of the year.

The bank has also announced that it is reinstating dividends at 7 cents per share. This is a part of the bank’s bigger initiative to reach a dividend payout ratio target of 40% to 55% for this year. When it comes to investments in Asia, HSBC Holdings has invested about $6 billion in China, Hongkong and Singapore, making new appointments in the region. This is a smart move from the bank considering that the Asian economy is continuing to grow, which could have a positive influence on its share price.

Should You Buy HSBA Shares?

Investors interested in HSBA shares should consider a few risks. While the majority of figures released by HSBC Holdings are impressive, there are some which are worrying. For instance, revenue for the bank is down in both the half-year and the second quarter, compared to the year before, which could cause issues for it if this trend were to continue. In addition to this, the bank faces quite a number of geopolitical obstacles with its plans for Asia.

HSBC Holdings has faced several challenges including issues with Brexit and US-China tensions. While HSBC has always remained neutral amid political disputes, it seems to be backing Beijing, instead of Hong Kong, which could be a costly move. Engaging in political disagreements could have a negative impact on HSBC Holdings especially since a large part of its pre-tax profits come from Asia.

With that being said, the latest results from HSBC are encouraging to say the least. There are high chances that the bank would profit from the recovery of the global economy post-pandemic. Many investors see the bank’s move to Asia in a positive light. While geopolitical reasons will certainly play a major part in the bank’s share price, it is still in a strong position at the moment. Considering all of this, investors should buy HSBA shares at the moment.

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