"Big Banks" JP Morgan: The proposed privatization of Hang Seng has already been reflected in the stock price regarding its short-term impact on HSBC

JP Morgan released a report stating that the planned privatization of HANG SENG BANK (00011.HK) has already been reflected in the short-term impact on HSBC HOLDINGS (00005.HK) stock prices, and investors may not factor in long-term synergies until management provides more quantitative guidance. The third-quarter performance will be a driving factor for short-term stock prices, with trading costs and credit costs due to exposure in Hong Kong commercial real estate being key variables.

Additionally, Standard Chartered (02888.HK) saw its stock price drop by 5.1% on October 17, underperforming the Hang Seng Index and HSBC by 2.6 and 3.1 percentage points, respectively, possibly due to investors adopting a risk-averse sentiment following U.S. credit risk events. The bank believes that if the stock price adjusts further, it will present a buying opportunity, as Standard Chartered has limited direct exposure to the U.S. market and has strengthened its risk management measures in recent years, leading to a reduction in risk exposure. Furthermore, market volatility may positively impact Standard Chartered's market revenue in the fourth quarter.

The bank maintains an "overweight" rating on both HSBC and Standard Chartered, but prefers Standard Chartered for a six-month investment outlook. It maintains a target price of HKD 122 for HSBC and raises the target price for Standard Chartered from HKD 162 to HKD 168