Question

Why is now a good time to invest in HSBC shares, show reasons why ?

Answer 1

HSBC had lost a significant portion of its market cap in 2019 owing to its reduced profitability in the 2nd quarter, since then HSBC has improved its operations specially in the Asia Markets. As a result of reduced share price when we compare it with peers we see HSBC has a cheaper P/E than the peer group.

Company	P/E
Morgan Stanley	11.33
JPMC	13.76
Goldman	11.09
Bank of America	13.1
Citigroup	10.8

The average P/E of the major players in the financial services industry comes to 12.02 while the P/E of HSBC is at 11.71

The revenue has also increased compared to the previous quarter while the operating cost has been kept under control showing possible growth in the EPS in next quarter.

Another reason to buy HSBC share can be its low Beta value of 0.7 which can somewhat hedge if ones portfolio contains index sensitive equities.