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HSBC Annual Results 2020

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
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Wizard
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Re: HSBC Annual Results 2020

#389061

Postby Wizard » February 23rd, 2021, 10:00 am

Dod101 wrote:
moorfield wrote:
No. Since this is the HYP Practical board after all, let's remind ourselves of what has become obvious this morning (see also my previous post):

HSBA is a low yield share.

Neither a candidate for new purchase or top up imo (I apply a sort of equivalence principle to both actions), but I respect those of a firmer pyadic constitution will continue to hold.

Now the fog has cleared and it is offering a yield less than half of my benchmark, I will be selling shortly. Despite crystallizing a capital loss, I can double if not treble forecast income over the next few years on what's left from dividends elsewhere. I'm not going to hang around waiting for HSBA's new "sustainable" dividend to catch up.


If you really think that why on earth did you not sell in April 2020 when they were forced to desist from paying a final for 2019? It did not take a crystal ball to see that a) they would not be paying quarterly dividends for 2020 and b) that any dividend now would be relatively modest. In fact, it is rather more than some of us were expecting , and there was never any prospect of their simply paying dividends for 2021 as though the pandemic had never happened.

I am not sure I would add to my still considerable holding bit I will not be selling either.

Dod

I think it has often been said that a 'knee jerk' reaction can be a mistake - I think initially a TJH point. So I can see why somebody would hold on after the initial cut, I just think it is still too soon to consider the dust settled.

Another recently discussed hare that illustartes that is Marstons. I imagine if inclined to do so, those who jumped ship and sold out when the shares were 20p or 30p will look back now with 20:20 hindsight and recognise it was a mistake. I think this is more important to consider for income investors than those looking at TR. Selling Marstons at say 30p may have allowed the use of the capital released to buy a share paying maybe 7 or 8% at the time, so 2.4p per year. At the current price of over 90p that 2.4p can be achieved from a much wider range of replacement candidates, or a much higher replacement income can be achieved. Of course the replacement share may have 'bounced back by more than Marstons, but considering that and / or trading in and ot of shares for capital gain is not very HYP.

moorfield
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Re: HSBC Annual Results 2020

#389074

Postby moorfield » February 23rd, 2021, 10:24 am

Dod101 wrote:If you really think that why on earth did you not sell in April 2020 when they were forced to desist from paying a final for 2019? It did not take a crystal ball to see that a) they would not be paying quarterly dividends for 2020 and b) that any dividend now would be relatively modest. In fact, it is rather more than some of us were expecting , and there was never any prospect of their simply paying dividends for 2021 as though the pandemic had never happened.



The question to be answered before I sell anything is "Where does the money go?"

Last year, particularly that month, was an exceptional one. With yields being cut, suspended or cancelled left right and centre during that time, I couldn't confidently answer that question, so with regards HSBA I elected to sit on my hands until these results came.

Now I know where the money is going - a share yielding 6.7% which has being paying a stable dividend for the last five years (including through the pandemic) and imo will continue to do so for the forseeable future. So, goodbye HSBA.

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Re: HSBC Annual Results 2020

#389079

Postby moorfield » February 23rd, 2021, 10:32 am

IanTHughes wrote:You must do what you think is right for you, but you would be well advised not to fool yourself into thinking that you know the future any better than anyone else. I can assure you that you do not!



No I don't, but based on the information I have to hand today, I judge that there are better deliverers of income than HSBA that I can employ instead.

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Re: HSBC Annual Results 2020

#389085

Postby Dod101 » February 23rd, 2021, 10:40 am

moorfield wrote:
Dod101 wrote:If you really think that why on earth did you not sell in April 2020 when they were forced to desist from paying a final for 2019? It did not take a crystal ball to see that a) they would not be paying quarterly dividends for 2020 and b) that any dividend now would be relatively modest. In fact, it is rather more than some of us were expecting , and there was never any prospect of their simply paying dividends for 2021 as though the pandemic had never happened.



The question to be answered before I sell anything is "Where does the money go?"

Last year, particularly that month, was an exceptional one. With yields being cut, suspended or cancelled left right and centre during that time, I couldn't confidently answer that question, so with regards HSBA I elected to sit on my hands until these results came.

Now I know where the money is going - a share yielding 6.7% which has being paying a stable dividend for the last five years (including through the pandemic) and imo will continue to do so for the forseeable future. So, goodbye HSBA.


So do not keep us in suspense. Where are the proceeds going? Last April I bought 3i Infrastructure at £2.45, now about £3 and a current yield of 3.7%. Quite good enough for me.

Dod

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Re: HSBC Annual Results 2020

#389087

Postby Dod101 » February 23rd, 2021, 10:44 am

dealtn wrote:
Dod101 wrote:
If you really think that why on earth did you not sell in April 2020 when they were forced to desist from paying a final for 2019?


Perhaps because the price available in April wasn't seen as being good enough. It is higher now. People have all manner of reasons for selling, or not selling (and indeed buying and not buying). I imagine price to be high up the list of such reasons.


During April 2020, the price recovered to above £4 and remained there for quite some time so there was plenty opportunity to sell but moorfield has commented since your post and anyway it is up to him but I just thought/think that it was rather optimistic to hope for anything more than we have got today from HSBC by way of dividend. I am happy with 15 cents.

Dod

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Re: HSBC Annual Results 2020

#389088

Postby moorfield » February 23rd, 2021, 10:45 am

Dod101 wrote:So do not keep us in suspense. Where are the proceeds going? Last April I bought 3i Infrastructure at £2.45, now about £3 and a current yield of 3.7%. Quite good enough for me.



Off topic for this thread. You'll see an update from me elsewhere in due course.

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Re: HSBC Annual Results 2020

#389091

Postby Dod101 » February 23rd, 2021, 10:51 am

You must be Fundsmith in the making.

Dod

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Re: HSBC Annual Results 2020

#389114

Postby MDW1954 » February 23rd, 2021, 11:54 am

Dod101 wrote:
moorfield wrote:
No. Since this is the HYP Practical board after all, let's remind ourselves of what has become obvious this morning (see also my previous post):

HSBA is a low yield share.

Neither a candidate for new purchase or top up imo (I apply a sort of equivalence principle to both actions), but I respect those of a firmer pyadic constitution will continue to hold.

Now the fog has cleared and it is offering a yield less than half of my benchmark, I will be selling shortly. Despite crystallizing a capital loss, I can double if not treble forecast income over the next few years on what's left from dividends elsewhere. I'm not going to hang around waiting for HSBA's new "sustainable" dividend to catch up.


If you really think that why on earth did you not sell in April 2020 when they were forced to desist from paying a final for 2019? It did not take a crystal ball to see that a) they would not be paying quarterly dividends for 2020 and b) that any dividend now would be relatively modest. In fact, it is rather more than some of us were expecting , and there was never any prospect of their simply paying dividends for 2021 as though the pandemic had never happened.

I am not sure I would add to my still considerable holding bit I will not be selling either.

Dod


I began buying in the autumn at 300p per share, and have made several purchases since. At this price, I will keep buying.

MDW1954

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Re: HSBC Annual Results 2020

#389690

Postby Arborbridge » February 24th, 2021, 6:42 pm

moorfield wrote:
Dod101 wrote:So do not keep us in suspense. Where are the proceeds going? Last April I bought 3i Infrastructure at £2.45, now about £3 and a current yield of 3.7%. Quite good enough for me.



Off topic for this thread. You'll see an update from me elsewhere in due course.


I would probably strictly off topic, but people do mention things here in passing which are not dead on target. It would have been acceptable to most of us, I dare say, to have mentioned which fund you are diverting into, assuming it was a one-liner in an otherwise normal HYP discussion

Arb.

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Re: HSBC Annual Results 2020

#389739

Postby moorfield » February 24th, 2021, 8:39 pm

Arborbridge wrote:I would probably strictly off topic, but people do mention things here in passing which are not dead on target. It would have been acceptable to most of us, I dare say, to have mentioned which fund you are diverting into, assuming it was a one-liner in an otherwise normal HYP discussion


There are much higher yield and more reliable dividends to be had still from the banking sector than HSBA. I will cite the Breelander Convention here and leave it at that ... ;)

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Re: HSBC Annual Results 2020

#389831

Postby Arborbridge » February 25th, 2021, 7:41 am

moorfield wrote:
Arborbridge wrote:I would probably strictly off topic, but people do mention things here in passing which are not dead on target. It would have been acceptable to most of us, I dare say, to have mentioned which fund you are diverting into, assuming it was a one-liner in an otherwise normal HYP discussion


There are much higher yield and more reliable dividends to be had still from the banking sector than HSBA. I will cite the Breelander Convention here and leave it at that ... ;)


That's a good point: the "BG" would have allowed you to mention what you were thinking of investing in anyway, without being OT 8-)

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Re: HSBC Annual Results 2020

#389834

Postby Dod101 » February 25th, 2021, 7:59 am

The FT yesterday was advocating HSBC to sell or spin off its UK bank and concentrate on the Far East/China since the UK bank together with the US retail bank and France is a real drag on its results with not much prospect of real improvement. They are sending some senior staff back to Hong Kong although maintaining their HQ in London. Ominously for UK landlords they appear to be intending to substantially reduce their need for office space, partly as a result of home working. They will not be the only ones.

I think had it not been for Covid that we would have seen the restructuring happening much more quickly, and once we get rid of the undue influence of the PRA we will see their dividends being restored to more attractive levels but, like other companies, at rather lower levels than we had pre Covid. Having experienced a year of no dividends I think I can live with modest dividends for this year.

Dod


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