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Let's look at some of the stocks on the move today here in Europe. I'm Caroline Hepget. I'm joined bar Blomberger portaclomb La. Good morning, Gary. Let's start with hst BC. They're going big on Hong Kong. What about the investor reaction though.
Yeah, they actually down quite a bit this morning after announcing the plans to privatize Hanksang Bank, which is one of its Hong Kong subsidiaries that has been in quite a troubled spot lately. So HSBC owns about sixty three percent of that bank and we'll spend around fourteen billion
dollars buying the shares it doesn't already hold. The problem that investors seem to have with this is that to keep its capital ratio within range, HSBC said it will it will have to refrain from buybacks for the next three quarters to investors, and investors tend to want those buyo backs, So that explains at the shares being down this morning. From a strategic perspective, though, this does represent quite a big bet on Hong Kong and the time
when there's lots of happening there. At the moment, dealmaking is on the up again, it's rising again. But then at the same time the banking sector is under a lot of stress from a real estate slam that has left a lot of banks with bad, really bad commercial real estate debt. The CEO, George Lderry, said that the deal had nothing to do with the bad debt situation and that it was very much an investment for growth.
But for now inversas aren't too keen on what that means for their shareholder returns.
Of course, yeah, absolutely, HSBC shares also trading in Hong Kong. We are lower overnight.
Now.
State agents normally love a client with a budget, but the rumors around Rachel Reeves's upcoming budget is actually turning things a bit more at sour in the property market. Just to explain why.
Yeah, absolutely so we have some of the key US UK Sorry a house builder names this morning down so Taylor wimpy person about red Row, and that is because there's new data showing that there's even more pressure on the UK housing market at the moment. So we've had a new research that shows that ukstate agents have turned pessimistic for the first time in two years, and that is due to those fears of tax rises and wider
economic concerns. So a lot of that gloomy feeling can be attributed to those rising worries that there will be more tax increases in the budget in November as Chancellor of ragel Reeves really tries to plug that fiscal hole, and those tax rises will probably weigh even more on a housing market that's already not in the best spot. It's already had to deal with stamp duty increases in
April and just wider economic concerns. So some agents have said that the usual pickup post summer has not materialized yet because buyers are actually delaying decisions until we get that budget. So we'll have to keep an eye on that. But in the meantime, it seems like the house building sector doesn't have the best outlook so far. Yeah.
Absolutely, you got to think that the stamp duty tax on property purchases goes from zero if you're buying the least expenses up to one hundred and twenty five thousand pounds, but then if you're over one point five million, it gets up to twelve percent twelve percent tax on the price the value of that property that has to be paid, so it is a significant tax. Lloyd's also has responded to the FCA's long running motor finance saga, just briefly on their share price.
Yeah well, it put out as stament today is saying they will have to set aside additional provision to compensate customers who have missed all those carloons. It did not give a figure, but it said the provision might be materials already set aside one point fifteen billion pounds and probably have to set aside another five hundred million, and that is driving down the sheds.
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