MARKET TALK: JPMorgan Keeps HSBC At Overweight; HK$115 Target

28th Jun 2010 05:06

0406 GMT [Dow Jones] STOCK CALL: JPMorgan keeps HSBC (0005.HK) at Overweight with HK$115 target; expects bank's tier 1 ratio to improve 30 basis points to 11.1%, total capital adequacy ratio to also increase 30 basis points to 14.0% following its announcement last week of an issuance of US$3.4 billion 8% perpetual subordinated capital securities, which will be qualified as innovative tier 1 capital. Issue size represents 3% of tier 1 capital, 2% of total capital. "It appears to be a plain vanilla issue of perpetual subordinated debt without step-up or options." Notes, given cap of maximum 15% of tier 1 capital, expects there's room for further innovative tier 1 issuance of 2% (US$2 billion). Stock last down 0.1% at HK$75.20. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires June 28, 2010 00:06 ET (04:06 GMT)