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Will a busy month for HSBC shares continue in the New Year?

As 2019 comes to a close, it is fairly normal in the financial markets for things to start dying down. Less news, fewer company announcements, and people beginning their holidays (not to mention the ‘holiday mood’ in the office), usually mean there is just less action towards the end of the year. HSBC Holdings (LSE: HSBA) certainly seems to be bucking this trend, and not necessarily for the good.


Earlier this month interim CEO Noel Quinn announced another big move as part of his restructuring efforts – a reshuffle of its top executives and the hiring of a new Chief Operating Officer, John Hinshaw, formally of Hewlett Packard.

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The move comes as the bank is set to unveil its full restructuring plans in the New Year, which we already know will include large cost-cutting efforts across staff, as well as a shifting of resources away from the US and Europe and towards HSBC’s more profitable markets in Asia.

The bank said the changes will “position the group for the next phase of its strategy”, which almost certainly means losing some of the current 237,000 headcount – a number that has always been seen as too large and filled with bureaucracy.

I think this, as well as the other changes we can expect to see, will benefit the bank and its shareholders. Consolidating its assets to some extent in Asia may also be a good move, concentrating efforts and capital where they can do the most good. Unfortunately, December also saw perhaps the first major snag for HSBC on this front.

Protestors need bank accounts

The protests in Hong Kong have been causing some concern for many companies operating in the region, though risks and uncertainty have generally been the problem more than actual costs or troubles. Today though, HSBC may have just got more directly involved.

Protestors have called for a boycott of the bank amid allegations it helped the police shut down one of the main sources of funding for the anti-government movement. HSBC closed an account in November that belonged to a crowd-funding operation for the protestors called Spark Alliance.

HSBC denies it did this under any pressure from (or on behalf of) the government, instead saying it was a normal procedure given that the customer in question was unable to explain unusual activity in the account.

Needless to say the protestors are not sympathetic to these explanations, and have called for members to boycott the bank and perhaps more worryingly, have warned of “renovations”. This is the term used by the protestors for the damage and vandalism they inflict on businesses they deem opposed to their movement.

In the immediate future, this new exposure and more direct involvement with the troubles is worrying. Coming at a time when the bank and Mr Quinn will be hoping for a decisive and clear message to the market when it announces the full scale of its restructuring next year, the impact could be even greater.

Personally I think HSBC is a solid business and a good income stock, so I will be on the lookout for any short-term losses in 2020 as a dip buying opportunity rather than anything to worry about just yet.

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Karl has shares in HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.