Broker snap: Money-laundering issues mean HSBC's a 'sell'

18th Jul 2012 11:45

Galvan Research has labelled shares of global banking giant HSBC as a 'near-term sell' given the money-laundering issues that have weighed on the stock recently.HSBC released a statement on Tuesday admitting it "sometimes failed to meet the standards that regulators and customers expect" and said it "will apologise" for its mistakes. The bank has been forced to say sorry after an investigation by the US Senate found it had ignored clear signs its Mexican division was being used as a conduit for billions of dollars of drug money to be transferred to America.The investigation also found HSBC continued to do business with a Saudi Arabian bank with suspected links to terrorist financing operations. "HSBC has been forced to swallow a vey large slice of humble pie following the rather damning issues with money laundering," said Andrew Gibson, the head of research at Galvan."The general battering being absorbed by the banking sector both at home and abroad at present mean that the otherwise solid fundamentals are being ignored. The HSBC story looks set to run and run, marking the shares out as a near term sell for the Galvan Research team," Gibson said.Galvan highlighted that the shares have consistently failed to move above 560-580p since the start of the year. "While this band remains in place to block the price action, a minimum retest of the former late May intraday support zone towards 500p looks increasingly likely."By 11:45 on Wednesday, HSBC was trading 0.89% lower at 542.55p.BC