HSBC Research published a report indicating that due to improved investment sentiment in October, deposits continue to migrate, with fixed deposit balances decreasing by 31.6 billion HKD month-on-month, while current and savings deposits (CASA) balances increased by 35.6 billion HKD month-on-month. However, loan demand remains weak, and capital markets activity has also slowed down.

HSBC Research pointed out that the market's expectations for interest rate cuts have cooled, which is seen as more favorable for banks compared to Hong Kong Exchanges and Clearing (00388.HK). Although loan demand may continue to be weak in the short term, banks may choose to enhance shareholder returns through share buybacks or dividends. Hong Kong banks are also actively expanding their wealth management franchises to seize fee income opportunities. The bank prefers boc hong kong (02388.HK), being bullish on its ability to capture cross-border wealth demand and its potential to provide clearer long-term capital return plans.

Stock | Investment Rating | Target Price (HKD)

Hong Kong Exchanges and Clearing (00388.HK) | buy | 382 HKD.

boc hong kong (02388.HK) | buy | 30.8 HKD.