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HSBC (LON: HSBA) share price has staged a strong recovery since November as the company has been undergoing significant changes. The stock rose to 520p, its highest level since September 23. It is up 18.67% from the November low. Overall, the stock is up 3% in 2022, making it one of the best-performing banking stocks.
The winds of change are blowing
HSBC is one of the biggest Banks In the world – precisely 7 no. It has more than $2.9 billion in assets and 226,000 employees worldwide. The company, which has UK roots, earns most of its revenue in Hong Kong and continues to grow in mainland China.
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HSBC has been on a transformational journey over the past few years. As part of this journey, the company has sold some of its less profitable franchises. It sold its US retail bank to Citizens Bank. It also sold its French retail banking business to Cerberus Capital. And more recently, HSBC announced a deal to sell its Canadian Business to RBC.
HSBC’s management hopes the disposals will leave a bank with strong operations in China and the UK. It is the second largest bank in the UK by assets after Lloyds.
Impatient investors, led by Bing An Insurance, have called for the bank to break itself up. Precisely, the insurer believes that if it separates its China and UK businesses, the company will unlock more shareholder value.
By separating its businesses, HSBC can increase revenue, the insurer argues. It also helps the investors to choose the bank of their choice.
Another wind of change is the company’s rising spending on technology. The company’s expenses rose 5% last quarter to $7.3 billion. These investments will pay off in the next few years.
HSBC Share Price Prediction
The daily chart shows that the HSBC share price has been on a strong rally over the past few weeks. The stock has moved above the 25-day and 50-day moving averages, which is about to form a good crossover. It has also moved above the Ichimoku cloud while the Relative Strength Index (RSI) has moved near overbought levels.
Therefore, shares will continue to rise as buyers target the September high of 560p. A drop below 480p support will invalidate the positive display.
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