02388 Overview

Collaboration Announcement: BOC HONG KONG has announced a deepened collaboration with UnionPay International to enhance its mobile payment services.

New Payment Features: Starting today, BoC Pay+ users can utilize payment functions through UnionPay network apps in China, allowing transactions with over 150 key merchants in essential consumer sectors.

Southbound Stock Connect Insights: HSBC Global Research highlights recent historical highs in southbound fund flows, indicating investor concerns but maintaining confidence in long-term capital inflows despite short-term volatility.

Preferred Stocks in Hong Kong: The report favors HKEX and BOC Hong Kong among Hong Kong financial stocks due to their revenue potential from increased market activity and suitability for long-term yield-oriented investors.

Chinese Financial Stocks Preference: HSBC prefers bank stocks over insurance stocks in the short term, citing stable earnings and dividends, particularly favoring large state-owned banks like ICBC and CCB.

Short Selling Data: The report includes short selling data for various stocks, indicating significant short selling activity in both HKEX and BOC Hong Kong, with varying ratios across different stocks.

Support for Affected Customers: BOC Hong Kong is providing additional support to customers impacted by the Wang Fuk Court fire, in collaboration with the Hong Kong Monetary Authority and the Hong Kong Association of Banks.

Extended Grace Period: The bank has extended the grace period for repayment of mortgages, personal loans, and credit cards for affected customers by six months, now lasting until the end of November 2026.

Positive Outlook for Hong Kong Financial Stocks: Jefferies is optimistic about Hong Kong financial stocks in 2023, driven by an active IPO market, cross-border capital flows, and a recovering residential property market, with expectations of HIBOR normalization by 1H26.

Stock Recommendations: Jefferies upgraded HKEX to Buy, raising its target price from HKD373.94 to HKD502, citing its higher leverage effect and attractive valuations.

Local Banks Performance: While local bank stocks are expected to yield positive returns, they may lag behind international counterparts due to lower capital returns, with BOC Hong Kong rated Hold and its target price increased from HKD31 to HKD48.

Bank of East Asia Insights: Jefferies anticipates high credit costs for Bank of East Asia but sees trading opportunities linked to potential index inclusion and property market recovery, raising its target price from HKD12 to HKD16.

Positive Outlook for Hong Kong Financial Stocks: Jefferies predicts a favorable year for Hong Kong financial stocks, driven by an active IPO market, cross-border capital flows, and a recovering residential property market, with expectations of HIBOR normalization by 1H26.

Stock Recommendations: Jefferies upgraded HKEX to Buy, raising its target price from HKD373.94 to HKD502, citing its higher leverage effect and attractive valuations.

Local Banks Performance: While local bank stocks are expected to yield positive returns, they may lag behind international counterparts due to lower capital returns, with BOC Hong Kong and Bank of East Asia rated Hold.

Target Price Adjustments: Jefferies increased the target price for BOC Hong Kong from HKD31 to HKD48 and for Bank of East Asia from HKD12 to HKD16, highlighting potential trading opportunities amid high credit costs and market recovery.

Green Loan Agreement: BOC Hong Kong has secured a one-year green loan of $70 million from Sinopec, marking a significant milestone as the first green loan in the petrochemical and energy sector certified by HKQAA.

Certification Standards: This loan adheres to the rigorous standards of the Green Loan Principles (GLP) and the Hong Kong Taxonomy for Sustainable Finance Phase 2A, highlighting its commitment to sustainable finance practices.