Morgan Stanley: If HIBOR remains below 3 for an extended period, it will benefit HKT, PCCW, and New World Telecom

Morgan Stanley pointed out that due to the weakness of the US dollar and the restrictions on the Hong Kong dollar's appreciation by the linked exchange rate, the one-month Hong Kong Interbank Offered Rate (HIBOR) fell from 4 cents to 1.9 cents within four days. High-leverage stocks such as HKT (06823.HK), PCCW (00008.HK), and New World Development (01686.HK) are beneficiaries.

The bank believes that if HIBOR remains below 3 cents for a longer period (2 to 3 months), compared to the 3.5 cents to 4 cents at the beginning of this year, there may be significant growth in cash flow and profits for the relevant companies. The bank estimates that for every 100 basis points change in HIBOR, HKT, PCCW, and New World Development could save interest of HKD 178 million, HKD 220 million, and HKD 135 million, respectively