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<Research>Citi Raises HSBC HOLDINGS TP to HKD120.9; LT Investors View Hang Seng Privatization as Sign of Confidence in HK Mkt
Recommend 45 Positive 60 Negative 44 |
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In its report on the UK and Hong Kong banking sectors, Citi said it held meetings with 39 financial investors located in Australia, Singapore, and Hong Kong last week. Specifically, discussions with Hong Kong investors were (unsurprisingly) centered around HSBC HOLDINGS (00005.HK), STANCHART (02888.HK), and BOC HONG KONG (02388.HK), with the major topic being the recent proposal to acquire minority shareholder interests in HANG SENG BANK (00011.HK). Citi found that Hong Kong's long-term investors had a more pragmatic attitude. Although investors believed the acquisition price was too high, long-term investors pointed out that this move would streamline the group structure, eliminate bureaucratic procedures within HANG SENG BANK, and demonstrate management's confidence in the Hong Kong market, which was undoubtedly a positive signal (the broker did notice improved local investor sentiment in the region apart from office commercial real estate). Having incorporated this transaction and the suspension of buybacks into its model, Citi raised its target price for HSBC HOLDINGS from HKD118.2 to HKD120.9 and reiterated the Buy rating. AAStocks Financial News |
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