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<Research>Jefferies Updates Interest Rate Forecast, Cuts TPs for HANG SENG BANK (00011.HK) & BANK OF E ASIA (00023.HK)
Recommend 24 Positive 48 Negative 28 |
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Jefferies has released a report updating its forecast model for Hong Kong banks with an around 150 bps cut in the FY25 average interest rate forecast due to recent changes in interest rate expectations, implying a Fed rate of 3.25% in 3Q25. Currently, market expectations for BOC HONG KONG (02388.HK) are relatively conservative, limiting further downside for the stock, while HANG SENG BANK may perform weaker owing to higher sensitivity and weak asset growth. Jefferies still believes that HANG SENG BANK's non-performing loans (NPL) have not yet peaked. In light of high vacancy rates and falling rents, the interest coverage ratio for Hong Kong commercial real estate remains tight even with a 150 bps rate cut. The broker trimmed its TP for HANG SENG BANK slightly from $80 to $79, with an Underperform rating, while chopping its TP for BANK OF E ASIA (00023.HK) from $10 to $9.5, with a Hold rating. AAStocks Financial News |
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