Saturday, January 24, 2009

HSBC? Not Yet; Hutchison Wampoo, the Next?

HSBC may have rebound in short term due to probable big accounts' closings on their open interest contracts. On the immediate past Wednesday, from 1000 to 1030, there were big lots of purchases on HSBC at 55.05. Similar purchases did not happen again in the remaining hours.
Nevertheless, it does not mean the end. Problems of HSBC, including cash outflow, loss of clients, ambigous amount of toxic asset, and internal struggle between American-backed shareholders and European-backed shareholders, have not all exposed and ended. The last factor has been the most price-affecting one.
On the other hand, Hutchison Wampoo has the following potential hazardous:
  1. It has substantial amount of debts which interest expenses will be ranged from 6-9% of the capital.
  2. The item "other financial investment" has been contributing around 1/4 of the total profits. No clear accounts on the details except, 3, and somoe other investments. Yet, all of them together only takes up not up to 10% of the total items. For the others, the statement only explains as "other cash and highly liquid asset".
  3. The financial asset that contributes the above income also takes up a substantial part of total asset of HW.The only factor that can reduce its risk is that it is owned by Mr. Li Ka-Shing and run by Mr. Fok Kin-ling.
So, please pay attention to any news about them.

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