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The Expert View: Xaar, HSBC and Anite
by Chris Marshall on Dec 10, 2013 at 05:01
HSBC UK spin-off could add 60p to share price
A spin-off of HSBC’s (HSBA.L) UK arm would potentially add 60p to the shares, one analyst has said.
Based on a report in the Financial Times that HSBC has sounded out investors about a flotation of its UK arm – with ‘thinking at an early stage’ – Espirito Santo analyst Shailesh Raikundlia said the listing of HSBC subsidiaries could provide a further catalyst for the group that he already rates a ‘buy’.
‘Based on the assumption that 80% of value in Europe is UK and that the ring fenced operations represent half of the UK, which could be valued at £20bn based on 10x P/E, then this could potentially add around 60p to our SoTP valuation of 850p,’ commented Raikundlia.
‘Therefore, such a move would crystallise a higher rating for the whole group, especially in the light of buoyant investor sentiment on the UK economy.’
‘For HSBC, a carve-out of the UK business would help to deal with the requirements of the incoming Vickers rules, which demand that UK banks ring-fence their domestic retail banking operations,’ the analyst added.
Shares in HSBC slipped 0.2% on Monday to 657p.
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