STOCKWATCH: HSBC higher after going ex-dividend

HONG KONG (AFX-ASIA) - HSBC shares were higher after going ex-dividend, with retail investors tempted to bargain hunt following the stocks recent sharp losses, dealers said. They said the rise may be seen as only a technical rebound, with institutional investors negative about the bank's outlook after Goldman Sachs downgraded its recommendation. At 11:12 am, HSBC was up 0.723 hkd at 97.50 on trade of 3.71 mln shares. The Hang Seng index was up 66.20 points at 13,559.23. Kenny Tang, associate director of Tung Tai Securities, said HSBC was higher on a technical rebound, despite going ex-dividend. "It is a technical rebound and it will be safer to buy HSBC at 95.0 hkd or lower because institutional investors no longer favour" the company, he said. He said HSBC was seen as overpriced after the recommendation downgrade by Goldman Sachs. Anthony Lok, an analyst with Nomura securities, said he was not surprised about the recommendation downgrade by Goldman Sachs, as investors were over-optimistic about HSBC's earnings outlook before the release of its 2000 results. "Our house has been a bit negative on HSBC and that's why we have retained a "neutral" rating for a while," he said. He said HSBC may stage a technical rebound in the short term but any upside will be limited. His house has a fair value of 110.0 hkd for HSBC, he added. "We may change the fair value (estimate) and we are still reviewing the numbers (in its latest results)," he said. Lok said investors are unlikely to lose confidence in HSBC, although the bank is planning to move its back-office operations to Guangzhou leading to a possible loss of 280 jobs in Hong Kong. "It is a cost-saving exercise and it is fully understandable," he said.

Related stock : (NIL)