HSBC Downgrade Clobbers Stock: More Writedowns Ahead

Shares of HSBC (HBC), the world’s largest company, tumbled 2.4% in Hong Kong today after Morgan Stanley analyst Anil Agarwal cut the firm’s rating from Equalweight to Underweight. Bloomberg:

There will be “further material reserve requirements and downgrades” at HSBC after declines in U.S. home prices during the first half of 2008, Morgan Stanley analysts led by Hong Kong- based Anil Agarwal said in a report today.

Bad debts at HSBC Finance Corp., the bank’s U.S. consumer banking unit, may rise to $15 billion this year from $12.5 billion, Morgan Stanley said.

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