HSBC, StanChart Differ in Exposure to U.S. Rate Environment -- Market Talk

Dow Jones04-22

0846 GMT - A higher-for-longer U.S. rate environment changes assumptions for the positioning of HSBC and Standard Chartered, Keefe, Bruyette & Woods writes in a note. Earlier this year, expectations that rates would fall quickly provided a bear case for HSBC as this would weigh on its net interest margin. Falling rates would also benefit activity in emerging markets and Standard Chartered's performance. However, the scenario has been reversed given strong labor prints and more persistent inflation, analysts Perlie Mong and Edward Firth say. They raise HSBC to market perform from underperform--pointing to its best-in-class cash return profile--and cut StanChart to underperform from market perform. "We believe that STAN is more likely to disappoint from here given its wider exposure to Asia as a region, which would likely come under more pressure," they write. (elena.vardon@wsj.com)

(END) Dow Jones Newswires

April 22, 2024 04:46 ET (08:46 GMT)

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