Beautiful Virgin Islands

Tuesday, Jun 24, 2025

If HSBC shareholders are patient, they will reap rewards when coronavirus crisis comes to an end

If HSBC shareholders are patient, they will reap rewards when coronavirus crisis comes to an end

Suspending dividends will help ensure banks have more liquidity to weather the financial storm, which will benefit shareholders in the longer run. Dividend payouts are not an entitlement anyway

To those people moaning about the non-payment of dividends by HSBC and Standard Chartered Bank, I say this: there are varying degrees of risk in investing in the stock market. There is no entitlement. The aim of the Bank of England in directing UK banks to suspend dividends is to help ensure that banks have sufficient liquidity to assist businesses to weather the storm in the current difficult financial climate, and to help those businesses to retain jobs.

Those moaning investors that hold 10,000 or 20,000 bank shares should be able to afford to make sacrifices for the common good. I suggest that those investors hold on to their bank shares to take advantage of the inevitable rise in their value when the Covid-19 crisis ends, as it surely will.

Eric Taylor, Sai Kung


Demand for bonus shares displays a lack of understanding

Recently, many British banks, including HSBC, have halted dividend payments and/or repurchases of stocks to address the impact of the Covid-19 outbreak.

Quite a number of HSBC shareholders were dismayed and even angered by the bank’s decisions, claiming that HSBC must pay their dividends as before, or offer bonus issues. They even have threatened legal action against the bank. As a student studying accounting and investment for a long time, I am amused by these investors’ absurd actions.



I would like to emphasise some basic principles about shares. First, unlike coupon payment of debentures, dividend to ordinary shareholders is simply not obligatory.

Second, can issuing bonus shares bring true benefit to these shareholders? Unfortunately, no. Issuing bonus shares is just an accounting trick. You have more shares from the firm, but the value behind each share also decreases correspondingly, which is similar to cutting a pizza into smaller pieces.

If investors ignore the rules of finance, that is their loss.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
×