Dividend.com: HSBC Strapped, Analyst Says

HSBC Could Need $20 Billion-$30 Billion

HSBC Holdings (HBC Quote) shares are down nearly 9% so far Wednesday, after a Morgan Stanley analyst said HSBC needs to raise between $20 billion and $30 billion in capital moving forward.

The analyst maintains that HSBC's Hongkong and Shanghai Banking division has one of the lowest reserves of any Hong Kong bank, and needs an extra $5.8 billion. After pumping $11 billion into its U.S. and U.K. businesses, the analyst sees little left as far as further liquidity is concerned.

We removed shares of HBC from our "Recommended" list back on Aug. 21, when the stock was trading at $77.37. The company has a 7.85% dividend yield, based on last night's closing stock price. The company's current dividend payout would certainly be in jeopardy if there is indeed a need for further capital.

The stock has broken to all-time lows on the technical side. If the shares can firm up at some point, we see the $52-$56 levels as an initial overhead resistance zone. We would look elsewhere for better investment opportunities at this time.

HSBC Holdings is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars.

Oracle Cutting Jobs

Sources are reporting that Oracle (ORCL Quote) is on the verge of laying off 500 North American sales and consulting employees this Friday.

Oracle has more than 85,000 employees, so this number of cuts would be relatively small considering recent efforts by companies to rein in technology spending.