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<Research>JPM: Tougher Cross-border Regulation Poses Limited Earnings Risk to Banks and Insurers; Overweight Rating Reiterated on HSBC HOLDINGS, STANCHART, AIA, FWD
Recommend 21 Positive 30 Negative 15 |
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Regulators in Mainland China and Hong Kong have recently toughened cross-border regulatory enforcement on securities, futures and fund activities, JP Morgan mentioned in its report. Although this has weighed on market sentiment toward Hong Kong financial stocks, the actual impact on fundamentals is likely to be limited. The broker reiterated its Overweight rating on HSBC HOLDINGS (00005.HK), STANCHART (02888.HK), AIA (01299.HK) and FWD (01828.HK). For bank stocks, as the tightening measures target new Mainland customers coming to Hong Kong, JP Morgan projected the 2025-28 wealth revenue CAGR to be reduced by only 0.6 ppts for HSBC HOLDINGS, 0.9 ppts for STANCHART, and 1.7 ppts for BOC HONG KONG (02388.HK). The negative impact on group revenue in 2028 would be less than 0.5%. For insurance stocks, the broker assumed the tighter measures are unlikely to create tremendous near-term revenue headwinds for AIA or FWD. In fact, as Mainland customers shift funds from online brokers to compliant financial institutions, Hong Kong banks and insurers may even post revenue growth. However, if regulations are further tightened to cover existing Mainland customers, the impact would be more pronounced, representing a medium-term overhang. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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