HSBC Holdings (00005) fell more than 3%, down 3.1% as of press time to HK$131.5, with turnover of HK$1.065 billion.
On the news front, Morgan Stanley released a research report stating that the recent pullback in HSBC Holdings' share price makes its short-term valuation more attractive. The bank believes the recent correction has been excessive and expects the stock to outperform the broader market index over the next 15 days.
The report noted that HSBC Holdings' third-quarter results showed steady wealth management fund flows, and the group is expected to have greater capital flexibility by 2027. Rising deposit competition will pressure the net interest margin, but HSBC Holdings is in a relatively better position compared to many peers. At the current price, the stock offers a forecast dividend yield of 5.4% for 2027 and a price-to-earnings ratio of 9.4 times, which the bank considers attractive relative to Hong Kong and ASEAN financial stocks.
JPMorgan noted that the key takeaways from HSBC Holdings' third-quarter analyst briefing were neutral to negative. Management acknowledged intensifying deposit competition in the UK and Hong Kong, with pressure being greater in the Hong Kong market. Given that Hong Kong's loan-to-deposit ratio is only 43%, this situation surprised the bank. Management also reminded the market to pay attention to the impact of business disposals, with approximately half of the US$2.2 billion in related revenue loss expected to be reflected in net interest income before 2028. Cost reallocation is expected to generate incremental revenue exceeding the aforementioned revenue loss, but there will be a time lag.
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