HSBC (LSE:HSBA) shares appeared unstoppable on the finish of February, reaching an all-time excessive of 1,410p. Since the Iran warfare began 5 weeks ago although, the inventory has declined by round 11%.
Therefore, anybody who invested £10,000 in the FTSE 100 financial institution again then would now have lower than £9,000. However, the identical quantity invested 5 years ago would at the moment be price roughly £30,400, even after March’s pullback.
Including reinvested dividends, the entire return can be round £34,000. Not dangerous for a uninteresting ‘old economy’ inventory!
I purchased HSBC inventory at 604p in early 2024. With the share value now above 1,250p, I’ve principally doubled my funding, earlier than dividends.
Looking again to the interval once I first invested, I wrote: “I expect the bank’s increasing focus on China and Asia to pay dividends (literally). The region is expected to boom in the decades ahead as middle classes expand and prosper. And HSBC will be there to serve them“.
Fast forward to now, my investment thesis hasn’t changed. Indeed, I’m more convinced than ever that significant institutional money will flow towards Asian markets over the next decade, driven by increasingly unpredictable US policy.
If I’m right, this should benefit HSBC, which has significant exposure to Hong Kong, mainland China, India, and Singapore. The lender has also opened up its first Middle East wealth centre in the UAE, where I hear quite a few well-off people reside.
But are HSBC shares worth considering after the 10% dip? I think so. The forward price-to-earnings (P/E) ratio isn’t particularly high at 9.7, while there’s an attractive 5.15% forward dividend yield.
Share buybacks are currently on hold after HSBC bought the 37% stake it didn’t already own in Hong Kong’s Hang Seng Bank for $13.6bn. But buybacks are widely expected to resume sooner rather than later.
The Middle East war clearly adds near-term uncertainty, as HSBC has been selectively increasing its exposure to the region. If there’s a global economic downturn, then banks and their shareholders will likely feel the pain.
As mentioned though, I’m still bullish on HSBC long term.
Another interesting UK stock is Boku (LSE:BOKU). With a £493m market cap, this is the equivalent of a stickleback compared to HSBC.
However, it’s also riding Asia’s vibrant economies by helping Western companies expand in the region. Its platform makes it easier for unbanked users to pay for goods and services via their smartphones.
Last year, revenue increased 30% to $128.8m, with adjusted EBITDA jumping 36% to $41.3m. Revenue from bundling, which helps tech giants like Netflix and Amazon bundle subscriptions into consumer mobile plans, surged 71% to $14.9m.
