HSBC's market cap hits $2 trillion on solid fundamentals, analysts say

HSBC (0005) shares hit a fresh high with market value surpassing HK$2 trillion, supported by solid fundamentals, analysts said.

The lender’s shares jumped 3.3 percent on Friday, giving it a market cap of HK$2.02 trillion. 

The rally was not driven by rate cuts, but the strength in global equity markets, which led to strong growth in non-interest income such as wealth-management fees and brokerage commissions, said Kenny Ng Lai-yin, securities strategist at Everbright Securities International. 

Independent stock commentator Casper Mok also believes the continuous growth in the lender’s deposit and wealth-management income provides further fundamental support for the share price.

The risks in Hong Kong’s commercial real estate sector have essentially all surfaced, meaning bad-debt pressure is now contained, Mok said.

Although the upside potential for bank stocks is limited, they offer strong defensive qualities, he said. 

Ng also advised existing shareholders to continue holding the stock. For those without positions, he said it is not ideal to chase at high levels and they should wait for a more meaningful pullback before buying. 

He added that as long as global market sentiment remains supportive, HSBC is still worth watching.