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Jefferies gains conviction on HSBC's DPS rise
Jefferies Research characterised HSBC Holdings'
(00005) 4Q adjusted PBT as inline, adjusting for noise around one-offs.
  The research house doesn't see underling consensus estimates moving. Capital was better
(14.5% CET1) supporting its thesis for higher DPS in 2018/19. The market will have to
await the new CEO's update (expected 1H 2018) to gain conviction that DPS will rise.
  Given the results and capital position, Jefferies  remains firm in its view that the 
company can increase its ordinary DPS to US$0.60/share in 2018 and US$0.66/share in 2019.
  Once AT1 (Additional tier 1) issuance is done, Jefferies expects HSBC will be back in
market buying shares. These elements are all needed to support current valuation. It 
retained its "buy" rating on the stock, with a target price of GBP9.5, or HK$103.79.

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