DBS raised its profit forecast for the Hong Kong Stock Exchange by 5% and 3% for the next two years, expecting the EBITDA margin of the Hong Kong Exchange to improve under better operational efficiency.
According to the information from the CCT Finance App, DBS released a research report stating that it maintains a 'buy' rating for the Hong Kong Stock Exchange (00388), expecting investors' risk appetite to improve during an easing cycle. Compared to other major emerging markets and stock markets in the Asia-Pacific region, the low valuation of Hong Kong stocks should attract foreign investors back. The target price was raised from HK$377 to HK$390. The bank raised its profit forecast for the Hong Kong Stock Exchange by 5% and 3% for the next two years, expecting the EBITDA margin of the Hong Kong Exchange to improve under better operational efficiency. A London Metal Exchange victory will significantly reduce future legal expenses.
The bank pointed out that recent stimulus measures in the mainland for real estate and capital markets have boosted investors' confidence in the Hong Kong and mainland stock markets. The average daily turnover of Hong Kong stocks this year has accumulated to 126 billion yuan, with expectations for strong momentum to continue. The bank maintains its forecast of daily turnover for the Hong Kong Stock Exchange at 120 billion and 144 billion yuan for the next two years, reflecting market expectations of the Federal Reserve's interest rate cuts in the fourth quarter of this year and next year to increase liquidity, as well as foreign investors potentially increasing their holdings of mainland and Hong Kong stocks. However, fourth-quarter trading activity may be limited by the U.S. presidential election and the December holidays.
