HSBC Holdings Plc, Europe's biggest bank, posted slower than expected earnings growth and a 12 percent drop in revenue, sending its shares as much as 4% lower. Olivetree's Simon Maughan says that the banking sector is trending up, but HSBC is left on the fringes. SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (AUGUST 5, 2013) 1. OLIVETREE SECURITIES, HEAD OF SECTOR STRATEGY GROUP, SIMON MAUGHAN, SAYING: JOURNALIST ASKING SIMON MAUGHAN: "There are a lot of issues it seems for this bank [HSBC]. The emerging markets story, the weakness in North America. What is there for investors to like?" SIMON MAUGHAN: "Well investors like the long-term story with HSBC which ever since Stuart Gulliver took over as CEO has basically been that he was going to reposition as much of the bank as he could in the faster growing emerging markets. Now as you recognized in his interim report today, in the short term the trends are actually going against that strategy with China slowing to an estimated 7.5% or so GDP this year and next and also some increases in provisions based on a slowdown in Latin America. The long-term trends, the group is absolutely adamant is still in place but shorter term, there is more excitement elsewhere in the sector." JOURNALIST: "And for how much longer is that shorter term weakness going to bug the share price?" MAUGHAN: "Well that is the critical point, of course. It's very easy for a management to stand up and say, well in the long term, we're in exactly the right place. And indeed, many people would say that's what more management should do but the market is made up of short-term daily and intra-day moves. And right now, the trend is for banks that have got exposure to US and North American investment banking, HSBC is relatively weak in that position. And of course in the UK, we've got all the excitement of the recovery going on at Lloyds and to a degree, RBS and the potential government share placing. So it just leaves HSBC on the fringes of the news fl...
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HSBC Holdings Plc
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