HSBC share price drops following lower-than-expected US$1 billion buy-back

The buy-back was announced after HSBC’s second-quarter pre-tax profit rose 60 per cent to US$10.15 billion, beating analysts’ estimate of US$9.5 billion The share price of HSBC Holdings fell 2.5 per cent on Tuesday afternoon following the lender’s announcement of a lower-than-expected share buy-back. HSBC – the top lender in Hong Kong – resumed its share repurchase programme for the first time since October on Tuesday, earmarking US$1 billion to buy back shares over the next three months, according to a stock exchange filing. The bank said in October it would have to pause share buy-backs for three quarters to conserve capital for its US$14 billion acquisition of subsidiary Hang Seng Bank. The market had widely expected HSBC to resume repurchases in the July-to-September quarter, with estimates ranging from US$1.5 billion to US$2 billion. The share buy-back, which fell short of expectations, led HSBC’s share price to fall 2.5 per cent to HK$164 in the early afternoon on Tuesday, following the announcement. It then recovered slightly, only to drop 1 per cent to HK$166.5. The stock has gained 36 per cent so far this year. The Hang Seng Index fell 0.6 per cent on Tuesday to 25852.92.

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