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Trending tickers: HSBC | Wood Group | Currys | Asos

The latest investor updates on stocks that are trending on Monday

Pedestrians wearing face masks following the coronavirus disease (COVID-19) outbreak, walk past a HSBC bank branch in Hong Kong, China February 22, 2022. REUTERS/Lam Yik
HSBC unveils Asia plan amid activist investor's challenge. Photo: Lam Yik/Reuters (Lam Yik / reuters)

HSBC (HSBA.L)

HSBC has unveiled plans to bolster revenues in its Asia business amid mounting pressure from its top shareholder to improve performance across the region.

The banking giant told investors it is aiming for revenues in Asia's wealth business to grow by up to 9% in the next three to four years.

It also wants to grow lending by around 15% in the medium- to long-term, which could take up to six years.

Read more: FTSE 100 higher as Currys boosts profit outlook

"All parts of HSBC Asia are now motoring," group chief executive Noel Quinn said.

The goals, which form part of a week-long seminar in Hong Kong and Singapore, follow an escalating dispute between the bank and its biggest shareholder, Ping An (2318.HK).

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Ping An has continuously applied pressure on HSBC, criticising its existing model as inefficient while pushing for a spin-off of its Asia business. According to the Chinese insurer, HSBC’s return on tangible equity in Asia stands at 10.5% in 2022, lagging behind the peer average of 13.8%.

Wood Group (WG.L)

Shares in Wood Group (WG.L) fell 34% after Apollo Global Management (APO) revealed it does not intend to make an offer for the FTSE 250 (^FTMC) engineering consultancy.

The investor had made five bids for Wood, before finally being granted access to the company's accounts in April for due diligence.

Financial services company Jefferies said: "We have spoken briefly with Wood who say Apollo's due diligence was extended and detailed since the decision to engage on 17 April and that little feedback has been given over Apollo's reasons."

The New York-based fund manager did not explain on Monday why it decided to ditch its bid to acquire Wood at 240p per share, valuing the company at about £2.2bn ($2.7bn) including debt.

John Wood said: “The board remains confident in Wood’s strategic direction and long-term prospects and believes that, following a transformative year in 2022, including new executive leadership and a new strategy, Wood is well placed to deliver substantial value for shareholders.”

Aberdeen-based Wood, which provides engineering services for the energy and materials sector, has come under pressure from an activist shareholder to boost its share price.

Currys (CURY.L)

Currys' share price rose by 4.6% after it raised its profit outlook for the last financial year.

The electronics chain said it anticipated a pre-tax profit of between £110m and £120m for the year to the end of April, having previously cut its profit guidance to around £104m.

Cost savings have boosted profits, with the firm previously saying it was on track to save £300m by 2023 to 2024 by making its supply chains and IT systems more efficient, and automating its back office.

The group said like-for-like sales in its UK and Ireland division fell 4% in its second half, having slid 10% in the first.

It forecast full-year profit in the division would be more than 40% higher, driven by improvement in its gross margin and cost savings.

However, in the Nordics business, like-for-like sales were down 12% in the second half, deteriorating from a 7% fall in the first, with the market described as "challenging".

"These positive surprises reassure that there is good downside protection to forecasts and that balance sheet risk has been removed," said analysts at Liberum.

Asos (ASC.L)

Asos was down a further 16% after weak results last week sparked jitters across investors.The selloff came after JP Morgan cut its target price for Asos to 610p, from £10.

Asos' shares now at their the lowest since February 2010.

Analyst Eleonora Dani at Shore Capital said: "It is becoming increasingly evident that Asos will need to seek further capital infusion to support its long-term viability."

"Despite the recent amendment of the RCF, which has increased to £350m from £250m with only £100m remaining undrawn, we believe a further capital raise is likely.

"This assessment is based on the realisation that the measures implemented may fall short in stabilising the business within the existing macroeconomic context."

The firm, which owns Topshop, posted a loss of £87.4m in the six months to the end of February, compared to a profit of £14.8m in the same period last year.

It said trading had been "very challenging" with sales down 10% in the UK and 7% in the US. But Asos said it was confident it would return a profit in the next six months.

Liberum slashed its price target on Asos to 500p from 700p after the online fashion retailer’s interim results.

The broker, which has a "sell" rating on the stock, said the results were "well below" current market expectations, with revenue declining 10% on a currency basis, and an adjusted pre-tax loss of £87.4m versus consensus of £63m.

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Adam Vettese, analyst at social investing network eToro, said Asos was unfortunate that the cost of living was hitting their target demographic of "fashion conscious twentysomethings".

"Not so long ago, Asos was seen as the future of retailing in this country but it has been a long time since it has lived up to that tag. Ironically, online-only retailers such as Asos and BooHoo (BOO.L) were meant to be the final nail in the coffin for bricks and mortar retailers, but the High Street is fighting back post-pandemic," he added.

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