"Foreign Capital Highlights" HSBC Research: In September, Hong Kong's industry deposits increased by 1.3% month-on-month, optimistic about HKEX, BOC HONG KONG, and BANK OF E ASIA

According to a report released by HSBC Research on the 5th, Hong Kong's industry deposits grew by 1.3% month-on-month in September, with a year-to-date increase of 10.2% and an annualized growth rate of 13.8%. Loan growth also turned positive, increasing by 0.7% month-on-month, reversing the negative growth seen in the previous two months. The growth in loans in the third quarter was mainly driven by financial companies, brokerages, and mortgage loans, while property development and investment loans fell by 3.2% quarter-on-quarter. The increase in property transactions supports mortgage loan approvals, indicating a more optimistic growth outlook for the fourth quarter.

In terms of interest income, the 1-month Hong Kong Interbank Offered Rate (HIBOR) remained stable in October, averaging around 3.5%, up from 2.0% in the third quarter. The bank's interest rate strategist expects that, due to continued active capital market activities, HIBOR will remain supported until the end of the year. Considering the rapid growth of deposits and traditional factors of tightening liquidity at year-end, the bank's outlook for net interest margin and net interest income in the fourth quarter has turned positive.

In the capital market, the average daily turnover of the stock market in October remained at HKD 273 billion, still higher than HKD 255 billion in the first nine months of this year. Net inflows from southbound funds continued, reaching HKD 93 billion that month, bringing the year-to-date net inflow to HKD 1.26 trillion. As of the end of October, there were 336 applications waiting to be listed, setting a historical high. The Hong Kong government and HKEX (00388) are advancing the listing system reform to further promote more overseas companies to list in Hong Kong.

HSBC Research is optimistic about HKEX, BOC Hong Kong (02388), and Bank of East Asia (00023), all of which have been given a "Buy" rating.

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