KUALA LUMPUR, May 5 (Bernama) -- Bursa Malaysia reversed earlier losses to end higher on Tuesday as buying interest gained momentum in the afternoon session, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.66 points, or 0.44 per cent, to close at 1,747.43 from Monday’s close of 1,739.77. The benchmark index, which opened 1.97 points lower at 1,737.80, moved between a low of 1,732.64 and a high of 1,747.82 throughout the day. Market breadth was negative with losers leading gainers 605 to 539. A total of 599 counters were unchanged, 889 untraded, and 11 suspended. Turnover decreased to 2.86 billion units worth RM2.59 billion compared with 3.05 billion units worth RM2.55 billion yesterday.
HSBC Holdings Plc reported a first-quarter profit miss, as rising credit costs and geopolitical risks offset otherwise stable operating performance.
Earnings Impacted by Rising Credit Charges
HSBC posted:
- Pre-tax profit: US$9.4 billion (vs US$9.6 billion expected)
- Expected credit losses: US$1.3 billion
Key drivers of higher provisions included:
- US$400 million tied to a UK fraud-related exposure
- US$300 million in additional allowances linked to deteriorating economic outlook from Middle East tensions
This reflects growing pressure on banks from credit risk and macro uncertainty.
Geopolitical Risks Hit Growth Regions
Although HSBC has no direct exposure to Iran, the spillover effects of the conflict are impacting:
- Middle East economies, a key growth region
- Global trade flows, where HSBC has significant exposure
As one of the world’s largest trade-finance banks, HSBC is particularly sensitive to disruptions in cross-border activity.
Industry-Wide Pressure on Bank Earnings
HSBC’s results mirror broader trends across global banks:
- Trading revenues remain volatile across asset classes
- Some peers like JPMorgan Chase & Co. outperformed on trading
- Others, including Standard Chartered Plc, also raised provisions linked to Middle East risks
This highlights how geopolitical shocks are feeding into financial sector earnings.
Restructuring Strategy Still on Track
Under CEO Georges Elhedery, HSBC continues its strategic restructuring:
- Streamlining operations
- Exiting non-core businesses
- Improving cost efficiency
The transformation has been well received by investors, with shares reaching record highs earlier this year before volatility from the Iran conflict.
Outlook: Resilient but Exposed to Global Risks
HSBC maintains that it is well positioned to navigate current uncertainties, but key risks remain:
- Geopolitical instability
- Rising credit costs
- Volatility in global markets
The bank’s performance will depend on how quickly economic conditions stabilise, particularly in key growth regions.
Investor Takeaways
- HSBC missed profit expectations, driven by higher credit provisions.
- Geopolitical tensions are increasing risks across global banking operations.
- Exposure to trade and emerging markets amplifies sensitivity to global shocks.
- Ongoing restructuring supports long-term outlook, despite near-term headwinds.
- Investors should monitor credit trends and geopolitical developments closely.
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