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<Research>G Sachs: Mainland Cross-border Investment Rules, Account Reviews Have Limited Earnings Impact on HSBC HOLDINGS, STANCHART
Since May 21, the share prices of HSBC HOLDINGS (00005.HK) and STANCHART (02888.HK) have underperformed the STOXX Europe 600 Banks Index (SX7P) by about 5% and 7%, respectively, Go...
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<Research>G Sachs: Mainland Cross-border Investment Rules, Account Reviews Have Limited Earnings Impact on HSBC HOLDINGS, STANCHART
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Since May 21, the share prices of HSBC HOLDINGS (00005.HK)  +4.300 (+3.105%)    Short selling $336.14M; Ratio 16.136%   and STANCHART (02888.HK)  +6.500 (+3.364%)    Short selling $32.62M; Ratio 8.913%   have underperformed the STOXX Europe 600 Banks Index (SX7P) by about 5% and 7%, respectively, Goldman Sachs said in its report. This mainly reflects investor concerns over a slowdown in deposit inflows into Hong Kong and potential restrictions on the two banks’ engagement with Mainland clients.

However, the broker believed the recent share price underperformance is not consistent with the potential earnings impact of the announced measures and changes, and instead stems more from market uncertainty over possible future policy shifts.

Related NewsM Stanley: CN Tightening Capital Outflows Seen Having Limited Impact on HSBC HOLDINGS, STANCHART Wealth Mgmt Biz
Goldman Sachs’ analysis showed that for typical accounts held in Hong Kong by Mainland residents, around 90% of deposits originate from offshore sources (such as Singapore or other Hong Kong channels), with only about 10% directly coming from Mainland bank accounts.

Based on its sensitivity analysis, under an extreme adverse scenario in which the 10% of net new money (NNM) inflows from Mainland sources were to cease entirely, assuming current HIBOR at about 2.7% and a margin of 300 bps on those funds, the potential annualized impact on PBT would be only about 1% for HSBC HOLDINGS and 2% for STANCHART. The overall earnings impact would therefore be very limited.

Goldman Sachs set a 12-month TP of HKD165 for HSBC HOLDINGS (00005.HK)  +4.300 (+3.105%)    Short selling $336.14M; Ratio 16.136%   and HKD242 for STANCHART (02888.HK)  +6.500 (+3.364%)    Short selling $32.62M; Ratio 8.913%   , maintaining Buy ratings on both.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-12 16:25.)

Related News M Stanley: Recent Market Concerns Over Hong Kong Financial Sector Clearly Overdone

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