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<Research>Jefferies Upgrades HKEX to Buy, Raises TPs for BEA/ BOCHK
Recommend 46 Positive 72 Negative 57 |
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Jefferies was constructive about the outlook for Hong Kong financial stocks this year, propelled by an active IPO market, structural cross-border capital flows, and the initial recovery of the residential property market. Jefferies foresaw that future Fed policies may lead to HIBOR normalization, predicting that the one-month HIBOR will remain at the 2.5% level in 1H26. Among stocks, Jefferies favored HKEX (00388.HK) the most for its higher leverage effect, with current valuations below the long-term average. The stock was upgraded to Buy, and the target price raised from HKD373.94 to HKD502. Although Jefferies also expected local bank stocks to deliver positive returns this year, they may underperform international peers due to lower capital return levels. BOC HONG KONG (02388.HK) and BANK OF E ASIA (00023.HK) were rated Hold, with a preference for the former due to its more resilient fundamentals and higher return levels. BOCHK's target price was added from HKD31 to HKD48. As for BEA, Jefferies expected credit costs to remain high this year, but saw trading opportunities considering potential index inclusion and the recovery of the Hong Kong property market. If the de-risking is faster than expected, further re-rating is possible. The target price was lifted from HKD12 to HKD16. AASTOCKS Financial News Website: www.aastocks.com |
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