Glonghui, September 12 | UBS published a research report, predicting that the Federal Reserve will begin the interest rate reduction cycle in mid-September. The bank's Hong Kong economic team expects Hong Kong's three-month HIBOR to be 130 basis points lower than this year. At the same time, it believes that a lower interest rate environment is beneficial to the fundamentals of the telecommunications industry, can reduce corporate debt repayment burdens, drive capital inflow into risky assets, and is more likely to lead to re-ratings due to pressure on dividend yields. The bank said that since HKT's current debt is around 50%, it believes interest costs will be reduced, thereby improving dividend prospects. The bank raised the target price of broadband in Hong Kong from HK$3.16 to HK$3.3, and the rating from “neutral” to “buy”; HKT's target price remained unchanged at HK$12.5; and PCCW's target price was raised from HK$4.6 to HK$5, all of which were “buy”. The bank is most optimistic about HKT. Due to stable competition in the mobile communications market and the continued demand for digitalization from large enterprise customers, HKT's business prospects are the most resilient of the three companies. The bank favors Dengying over Hong Kong Broadband, mainly because the former has a lower southbound shareholding ratio and stable business operations, while the latter is still in the early stages of business transformation.