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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
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...
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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
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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)  +0.900 (+0.615%)    Short selling $654.42M; Ratio 25.873%   , STANCHART (02888.HK)  +4.600 (+2.184%)    Short selling $17.15M; Ratio 6.992%   , AIA (01299.HK)  +0.100 (+0.122%)    Short selling $918.32M; Ratio 22.848%   and FWD (01828.HK)  +0.580 (+1.965%)    Short selling $2.37M; Ratio 27.037%   .

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)  -0.260 (-0.539%)    Short selling $144.73M; Ratio 23.349%   . The negative impact on group revenue in 2028 would be less than 0.5%.

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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.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-02 16:25.)

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