Bank of China (HK) 2388

[Muhajir]

Not vested


Our pivot point is at 24.9.

Our preference: the downside prevails as long as 24.9 is resistance.

Alternative scenario: above 24.9, look for 25.5 and 25.9.

Comment: the RSI is below its neutrality area at 50. The MACD is negative and
below its signal line. The configuration is negative. Moreover, the share
stands below its 20 and 50 day MA (standing respectively at 24.56 and 24.53).

Supports and resistances:
25.5 *
24.9 **
24.6
24.2 last
23.2
22.8 **
22.4 *

[winston]

not vested

DJ MARKET TALK: BOC HK +3.2%; Yuan Business Beneficiary - SHKF

1121 [Dow Jones] BOC HK (2388.HK) rallies 3.2% to HK$22.90, likely spurred by news the HKMA again moved to develop the city's offshore yuan market Thursday, as it announced measures to increase yuan availability for local banks, and said it's in talks with China to ease limits on the retail yuan business.

SHK Financial says BOC HK is the only offshore yuan clearing bank in Hong Kong, which makes it well placed to benefit from the currency's increasing internationalization.

In particular, BOC HK has a greater proportion of yuan loans than its local peers and generates a higher net interest margin for its yuan business than for its Hong Kong dollar business; "increasing yuan-loan business should therefore help expand its overall NIM."

The house calls a Buy on BOC HK, targeting HK$24.20, with a stop-loss at HK$20.80.


Source: Dow Jones Newswire

[winston]

not vested

BOC HONG KONG (02388.HK) reiterated Conviction Buy with TP set at $30 by GS

BOC HONG KONG (02388.HK) is going to announce its third quarter results on October 25.

Goldman Sachs expects the profit of BOC HONG KONG before making provisions, would reach $6.15 billion, representing 2% quarter-on-quarter growth.

BOC HONG KONG has underperformed Hong Kong peers and Hang Seng Index by 7 percentage points and 8 percentage points respectively since announcing 1H12 results on August 23, said the broker, who believes investors pay too much attention on the bank's net interest margin and such attention has been factored in the stock price.

BOC HONG KONG was reiterated Buy with target set at $30 by the broker on 24% upside potential for the stock price.

Source: AAStocks Financial News

[winston]

not vested

DJ MARKET TALK: BOC's Earnings Beat Won't Spur Re-Rating - UBS

1020 [Dow Jones] UBS says Bank of China's (3988.HK) 3Q12 earnings beat was "entirely" due to a very low impairment charge; "indeed the 'reported' NPL ratio fell again to just 0.93% of loans, one of the lowest in the world.

The problem is this ratio seems so detached from what many investors see happening on the ground in China that it undermines balance sheet credibility.

Until this credibility is restored a sustained re-rating of the shares is hard to see despite headline earnings 'beats'."

The house adds that a positive in the results was that NIM actually increasing on-quarter by 6 bps to 2.16%, but its rough calculation suggests this was driven by a fall in cost of funds, noting that deposit balances shrank again in 3Q and have now fallen about 2% in 6 months.

This suggests the group did not compete for higher cost deposit funding in 3Q, and as a result LDR has increased to 74%. UBS keeps BOC at Neutral with a higher target price of HK$3.05 vs HK$2.90 previously.


Source: Dow Jones & Company, Inc.

[winston]

Dividend cut price

Bank of China Hong Kong (2388) was the worst performing blue-chip stock yesterday, plunging up to 8.1 percent as its dividend cut unnerved investors.

Shares of the lender, a subsidiary of Bank of China (3988), declined to a 21-month low yesterday, closing at HK$21.95, down 6.2 percent.

A total of 67.07 million BOCHK shares worth HK$1.47 billion changed hands yesterday.

On Wednesday, the bank announced it would trim the dividend payout ratio to 40-60 percent, compared with the previous 60-70 percent, in a bid to meet the increased Basel III capital requirements - to be fully implemented in 2019.

BOCHK has cut the payout ratio to 48 percent in 2013 from 62.5 percent a year earlier.

Chief executive He Guangbei explained the move would allow the lender more flexibility to determine the payout according to the operating performance.

Brokerage firms lowered their target prices immediately.

Daiwa Securities' changed its rating to a "hold" from "buy" and lowered the target price by 23 percent to HK$24.50.

Barclays recommended selling the shares and forecast the dividend payout ratio may be further lowered to 31-33 percent. JP Morgan described the dividend payout as disappointing although last year's performance was within estimates.

Source: The Standard HK

[winston]

not vested

Asset boost on cards at BOC Hong Kong

Bank of China (3988) is looking to inject some of its Southeast Asian assets into BOC Hong Kong (2388), the lenders revealed last night in a filing to the stock exchange.
The pair said BOC is considering transferring banking businesses and assets in certain ASEAN countries to the SAR amid a strategy review.

The People's Bank of China authorized BOC in January as the official yuan settlement bank in Malaysia. That was after similar moves in six other markets including Germany, France and Australia.

The change could enhance customer service, product innovation and marketing capability and its competitive edge in the region, BOC Hong Kong also said.

But the banks stressed there is no firm decision yet on restructuring.

Bank of China Hong Kong also announced it might sell subsidiary Nanyang Commercial Bank.

The sale could be implemented by way of public bidding through a financial assets exchange or other method of transfer, the bank added after gaining approval from the Ministry of Finance.

Estimates are that NCB is worth US$6 billion (HK$46.6 billion).

Source: The Standard HK

[winston]

`River of Money' probe into 300 Chinese, bank

Italian prosecutors have asked for 300 Chinese and the Bank of China's Milan branch to be tried for money laundering and tax evasion.

Prosecutors in Tuscany made the request following a probe into criminal networks in the region, long home to a large Chinese community that has drawn fire in the past for running clothes factories in sweatshop conditions.

The investigation, dubbed "River of Money," began in 2008 and focused on money transferred to China funds Florence prosecutors say come from exploiting illegal labor, counterfeiting money and tax evasion.

Those under investigation are accused of using the Money2Money transfer service to shift money from several Italian cities, with the Bank of China receiving over 750,000 euros (HK$6.6 million) in commissions.

The daily La Repubblica said between 2006 and 2010 over 4.5 billion euros was smuggled to China, with 2.2 billion euros going via the Bank of China's (BOC) Milan branch.

Denouncing it as an "awe-inspiring hemorrhage of money to China while Italian businesses were dying, torn apart by Chinese competition," it said 287 citizens in Italy were being probed, along with four bank officials.


Source: AGENCE FRANCE-PRESSE

[winston]

not vested

$68b eyed for bank unit  state firms only

BOC Hong Kong (2388) is seeking to sell its unit, Nanyang Commercial Bank, for a higher-than-expected HK$68 billion, but it wants interested buyers restricted to mainland corporates.

Bidding will close on August 25, BOC Hong Kong said in a statement yesterday. Potential suitors or their controlling shareholders must be financial institutions with Chinese government ownership of more than 50 percent, it said.

The asking price is higher than the market estimate of around HK$50 billion, and is equivalent to about 1.95 times Nanyang Commercial's book value at the end of 2014. The ratio could reach a local record of 2.27 times if based on the book value in the statement.

In 2013, Yue Xiu Group spent HK$11.6 billion to take a majority stake in Chong Hing Bank, valuing the lender at 2.08 times historical book value.

Last year, Singapore's Oversea-Chinese Banking Corp paid HK$38.7 billion for Wing Hang Bank, valuing the latter at 1.77 times.

If the Nanyang disposal materializes, that will become the largest sale of a Hong Kong bank to date.

Li Shanshan, a Beijing-based analyst at BoCom International Holdings, said the price for Nanyang is reasonable, as "this deal gives the potential buyer full control of NCB. That's why the seller can ask for a high price." In May, Bloomberg cited sources as saying that bad-loan manager China Cinda Asset Management., China Life Insurance, New China Life Insurance and Yue Xiu Group had been shortlisted to make offers for Nanyang.

Analysts said BOC Hong Kong is unlikely to earmark net sales proceeds as special dividend and will instead use them to buy assets in Southeast Asia from its parent, Bank of China (3988).

BOC Hong Kong closed 2.3 percent higher at HK$31.30, while Dah Sing Banking Group (2536), one of the few unsold local lenders, rose 3.5 percent.

Source: BLOOMBERG

[winston]

not vested

BOC Hong Kong (2388) posted a 9.3 percent year-on-year rise in net profit to a record HK$23.97 billion.

A final dividend of 67.9 HK cents per share was proposed, while the dividend payout ratio was up to 48.3 percent.

Total operating income surged 13.86 percent to HK$53.6 billion, driven by a 62.6-percent jump in net insurance premium income to HK$12.45 billion and a 26.1-percent rise in net fee and commission income to HK$11.47 billion. This offset a 3.7-percent drop in net interest income to HK$25.74 billion, about half of the total revenue.

The bank is estimated to pocket HK$34 billion in pre-tax income from the sale of Nanyang Commercial Bank.

It has not decided whether to pay special dividends, but part of the proceeds will be used to buy two southeast Asia assets from its parent Bank of China this year.

Source: The Standard

[winston]

not vested

Bank of China (Hong Kong) (2388 HK)

BOCHK announced that it has entered into an acquisition agreement with Bank of China (3988 HK), the parent company, to purchase the entire issued share capital of BOC Thailand and BOC Malaysia for HK$6.9b.

Though the valuation of the transaction is not cheap, the acquisition would further facilitate development of its business and anchor its foothold as a regional bank.

We maintain a BUY rating on BOCHK given its attractive valuation of 1.2x 2016F P/B and dividend yield of 5.4%.

Target price is HK$29.50.

Source: UOBKH