Re: Financial Industry 07 (Jul 18 - Dec 24)
Posted: Tue May 07, 2024 10:29 amHK Strategy: HK financials’ increasing focus on shareholders’ return
The latest results announcement season highlighted Hong Kong (HK) banks’ increasing focus on shareholder return with dividends and share buybacks.
The expectation of interest rate cuts to be pushed back to 3Q24, coupled with a relatively tight liquidity environment in HK is likely to keep the HIBOR at a relatively higher level, should lend further support HK banks.
Within HK banks, we prefer HK international banks which could benefit from fee and loan growth outside of HK and Mainland China.
HK international banks’, i.e. both HSBC (5 HK) and Standard Chartered (SCB, 2888 HK), better-than-expected guidances are getting traction.
With HSBC’s investment thesis has been pretty well communicated, we believe SCB is likely to have more near-term incremental flow.
We retain our preference of BOCHK among HK domestic banks given relatively cheap valuation among its local peers and potential earnings upward revision.
Source: OCBC
The latest results announcement season highlighted Hong Kong (HK) banks’ increasing focus on shareholder return with dividends and share buybacks.
The expectation of interest rate cuts to be pushed back to 3Q24, coupled with a relatively tight liquidity environment in HK is likely to keep the HIBOR at a relatively higher level, should lend further support HK banks.
Within HK banks, we prefer HK international banks which could benefit from fee and loan growth outside of HK and Mainland China.
HK international banks’, i.e. both HSBC (5 HK) and Standard Chartered (SCB, 2888 HK), better-than-expected guidances are getting traction.
With HSBC’s investment thesis has been pretty well communicated, we believe SCB is likely to have more near-term incremental flow.
We retain our preference of BOCHK among HK domestic banks given relatively cheap valuation among its local peers and potential earnings upward revision.
Source: OCBC