The UK-based HSBC Holdings PLC (GB:HSBA) and the French banking group BNP Paribas SA (FR:BNP) have been targeted by South Korea’s financial watchdog for alleged instances of “naked short selling.” According to Bloomberg News, the South Korean regulatory authority, FSC (Financial Services Commission), has proposed a minimum fine of 10 billion won ($7.6 million) each for both these banks.
The final amount has not been determined yet and could change after further discussions. The HSBC share price traded up by 0.83% yesterday, while BNP Paribas’ stock gained 0.92%.
More about Naked Short Selling
Naked short-selling, or naked shorting, is an illegal act of selling a tradable asset you don’t actually own or have not borrowed.
This year, South Korea has implemented several regulatory changes for its stock market, which include imposing stricter penalties for any violations. Last month, the FSC imposed a ban on short-selling until June 2024 to support retail investors in reaction to short-selling violations by foreign firms.
Meanwhile, let’s take a look at analysts’ ratings for HSBC.
Is HSBC a Good Share to Buy?
HSBC posted its third-quarter results for FY23 in October. Revenues jumped by 40% in Q3, and the pre-tax profits increased to $7.7 billion compared to $3.2 billion in Q2 2022. The bottom line gained from higher interest rates and the absence of an impairment fee in the same quarter last year. The bank confirmed its outlook for the full year and expects its net interest income to be above $35 billion.
According to TipRanks consensus, HSBA stock has received a Moderate Buy rating based on seven Buys, four Holds, and one Sell recommendation. The HSBC share price target is 798.6p, which is 29% above the current trading level.
Year-to-date, the stock has grown by almost 30% in trading.
