[siumai]

Is there anything special to know about the HSBC shares listed in London vs. those in Hong Kong?

E.g. today HSBC (0005.HK) closed at HKD 133.60 (7:59am UK time) and was trading at 828.00 p in LSE (HSBA.L). Something seems strange, in Yahoo 0005.HK has 52 weeks change of -7.45% but HSBA.L has 52 weeks change of -12.53%.

http://uk.finance.yahoo.com/q?s=0005.hk

http://uk.finance.yahoo.com/q?s=HSBA.L

[PDLM]

Could that just possibly be because the shares are quoted in different currencies and the currencies are not pegged?

[siumai]

Ah, yes of course. GBP appreciation vs. HKD explains the difference - thanks.

[freeier]

also i think lse shares might be slightly more expensive. the price difference mainly because LSE charges a ridiculous amount of money for clearance of stock which most other exchanges don't

[siumai]

I was still wondering about one thing: why does Yahoo! Finance calculate completely different P/E for 0005.HK vs. HSBA.L?

The closing of today for 0005.HK gave P/E of 12.0 while currently HSBA.L P/E is only 10.95 (at 8:32am UK time)?

Which one is (closer to) correct?

And, er, stupid question, why is it that some people say that P/E does not matter that much in bank stocks, that you should pay much more attention to Balance Sheet?

[PDLM]

Bit of a guess, but perhaps Yahoo uses the previous year's earnings converted at the exchange rate at the end of the year rather than today? HSBC's primary reporting currency is sterling I believe, so the London figure is more accurate. (And that is consistent with the pound having gained significantly since the last reporting date - that would have the effect of increasing the HK$ P/E if they did convert the earnings to HK$ at the rate of a few months ago.)

[flyingchair]

If HSBC keeps dropping and gets to 127 or 128 then I think it might become a reasonable buy for some margin making in the next six months. Been dropping best part of a dollar a day for a week.

[freeier]

cos banks are expected to make money. and their losses come when their balance sheet is saddled with bad debt that they have to write off.

[siumai]

Originally Posted by freeier

cos banks are expected to make money. and their losses come when their balance sheet is saddled with bad debt that they have to write off.

Er but how do you see that better from the balance sheet and not from P/E? They have written off all admitted bad debt and that shows in P/E.

[freeier]

beats me. that's why i am not an analyst 8-P