Hong Kong bank stocks extended gains in early trading, with HSBC HOLDINGS (00005) and STANCHART (02888) both reaching new highs. As of press time, HSBC HOLDINGS rose 2.81% to HK$117.2, while STANCHART gained 2.09% to HK$180.7.
The rally follows the U.S. Federal Reserve's recent decision to cut interest rates by 25 basis points and announce a $40 billion short-term Treasury purchase program to expand its balance sheet this month.
Bank of America Securities noted in a research report that HSBC HOLDINGS is expected to achieve significant growth in two key areas next year: Hong Kong deposit services and Asian wealth management. The report highlighted HSBC's competitive advantages in these segments, with management committing to increased investment, which is anticipated to further strengthen its market position.
Goldman Sachs maintained a positive outlook on STANCHART, stating that despite an 83% year-to-date surge in its Hong Kong-listed shares, the stock still has room for revaluation. The bank projects STANCHART's risk-adjusted return on tangible equity (ROTE) to reach 14.6% by year-end, exceeding management's 13% target, with further growth to 15% by 2027 and 15.7% by 2028. Goldman Sachs expects STANCHART to raise its mid-term ROTE guidance during its 2025 earnings report or investor day in May 2026, potentially serving as a catalyst for further share price appreciation.
Comments