Strategic Review updates of LSE listed HSBC Holdings Plc and Rio Tinto Plc

HSBC Holdings Plc

HSBC Holdings Plc (LON:HSBA) is a United Kingdom domiciled investment banking and financial services holding company with a presence across the globe. As per market data, by the end of 2018, it was the world’s seventh largest lender and the largest within Europe. This banking company was first established 154 years ago in 1865 in the erstwhile far-east British territory of Hong Kong. It has grown exponentially over the years to be present now all across Asia, Oceania, Africa, Continental Europe, North America and in South America. Today it operates in over 67 countries having 3900 offices and serving to over 38 million customers worldwide.

The banking corporation has got two primary listings, one at the Hong Kong Stock Exchange where its shares are traded with the ticket number 5 and at the London Stock Exchange where its shares are traded with the ticker name HSBA. The corporation also has three secondary listings, one at the New York Stock Exchange where its shares are traded with the ticker name HSBC, in Bermuda Stock Exchange where its shares are traded with the ticker name HSBC.BH and at Euronext Paris where the shares are traded with the ticker name HSB.

The shares of the banking company have a listing on the London Stock Exchange for trading. Here they trade in the Main market segment and are constituents of the FTSE 100 index.

Strategic Update

Antonio Simoes the chief executive officer of Global Private Banking division at HSBC in an interview to a leading global news agency said that the bank is aggressively pursuing double digit growth in its client assets and revenues riding on the phenomenal rise in the Asian economies. The bank has a significant presence in the continent and has benefited immensely from the growth the continent has seen in the past one and half decade. Currently the Asian region is the fastest growing region in the world and 42 per cent of the bank’s private banking assets come from this region. The bank has two main wealth management hubs in Asia, one in Singapore and another in Hong Kong, both of which have registered significant business growth during the year.

Antonio Simoes has assumed the role of chief executive officer of Global Private Banking division at HSBC in January of this year.

Performance at the London Stock Exchange

Source – Thomson Reuters

At the time of writing of this report on 29 November 2019 the shares of the company were trading on the London Stock Exchange for GBX 578.60.

The shares of the company during the past 52 weeks trading at the London Stock Exchange have registered a 52-week high of GBX 687.70 while also registering a 52-week low of GBX 565.90. The company has a market capitalisation of £118.07 billion on the London Stock Exchange.

Outlook

The Chinese economy has been the fastest growing economy of the world for quite some time now. The country has, however, provided little access to its domestic markets for foreign financial institutions. HSBC is only among a select few who have an extensive presence in this market, which gives it significant potential to grow in this market. The banking group also has a significant presence in India, the second fastest growing market in Asia, where also it enjoys significant growth prospects. Overall this bank is only one of the few banking groups listed on the London Stock Exchange with access to such high growth potential among its peer group.

Rio Tinto Plc

Rio Tinto Plc (LON:RIO) is an Anglo-Australian mining and metal corporation based out of Melbourne Australia. Founded in 1873 the company has over the years grown through mergers and acquisitions. It is the world’s foremost producers of aluminium, uranium, copper, iron ore and diamonds. The company though is having operations in six continents, its operations are mainly concentrated in Canada and Australia.

The company is listed both on the London Stock Exchange and at the Australian Stock Exchange. At the London Stock Exchange, the shares of the company trade with the ticker name RIO, and at the Australian Stock Exchange also the shares of the company trade with the ticker name RIO. The shares of the company are both constituents of the FTSE 100 index as well as the S&P/ASX 200 index.

At the London Stock Exchange, the shares of the company trade on the main market segment.

Strategic Update

The company on 31 October 2019 had conducted an investor meet where the company’s CEO Jean-Sébastien Jacques outlined companies’ strategy to navigate through the tougher times ahead on account of the anticipated slowdown in the world economy in the near future.

Mr Jean-Sébastien Jacques while discussing the broad macro-economic environment outlined the below four principals that the company will be stressing on to navigate through this period and also to guide them in further periods. The company will be following a strategy called 4Ps.

- Portfolio

- Performance

- People

 - Partners

Portfolio relates to the portfolio of products the company deals with, performance deals with the performance of each team in the company no matter what vertical they belong to, people relates to the individual performance of people working for the company and partners relate to the business relationships that the company has across the world.

The company intends to maintain its market beating investment in exploration with 69 programmes in 7 commodities across 18 countries with an estimated spending of $350 million in 2019. Copper remains the main focus of the company. The exploration programme is the key differentiator for the company and will help to keep its pipeline full.

Performance at the London Stock Exchange

Source – Thomson Reuters

At the time of writing of this report on 29 November 2019 the shares of the company were trading on the London Stock Exchange for GBX 4,220.00.

The shares of the company during the past 52 weeks trading at the London Stock Exchange have registered a 52-week high of GBX 4,979.14 while also registering a 52-week low of GBX 3,306.25. The company has a market capitalisation of £53.61 billion on the London Stock Exchange.

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Outlook

Rio Tinto is one of the largest companies in the mining and base metal production space in the world. The company has had a successful financial year and is doing a strategic rethink about how it should trade in the future. The current anticipated global economic slump has given the company additional impetus to push further on reviewing its strategy, while it still remains one of the most competitive companies in this space.