<div id="readability-page-1"><div>JPMorgan issued a research report stating that regulators in Mainland China and Hong Kong have recently tightened cross-border regulatory enforcement on securities, futures and fund activities. Although this has weighed on market sentiment toward Hong Kong financial stocks, the actual impact on fundamentals is likely to be limited. The bank reiterated its Overweight rating on HSBC HOLDINGS (00005.HK) -0.200 (-0.138%) Short selling $81.68M; Ratio 10.272% , STANCHART (02888.HK) +0.200 (+0.097%) Short selling $1.18M; Ratio 0.983% , AIA (01299.HK) +0.100 (+0.122%) Short selling $353.39M; Ratio 25.822% and FWD (01828.HK) -0.100 (-0.330%) Short selling $1.25M; Ratio 32.845% .For bank stocks, as the tightening measures target new Mainland customers coming to Hong Kong, JPMorgan expects the 2025-2028 wealth revenue CAGR to be lowered by only 0.6 ppts for HSBC HOLDINGS (00005.HK) -0.200 (-0.138%) Short selling $81.68M; Ratio 10.272% , 0.9 ppts for STANCHART (02888.HK) +0.200 (+0.097%) Short selling $1.18M; Ratio 0.983% , and 1.7 ppts for BOC HONG KONG (02388.HK) +0.780 (+1.654%) Short selling $23.82M; Ratio 11.217% . The negative impact on group revenue in 2028 would be less than 0.5%.For insurance stocks, the bank believes the tighter measures are unlikely to create significant near-term revenue headwinds for AIA (01299.HK) +0.100 (+0.122%) Short selling $353.39M; Ratio 25.822% or FWD (01828.HK) -0.100 (-0.330%) Short selling $1.25M; Ratio 32.845% . In fact, as Mainland customers shift funds from online brokers to compliant financial institutions, Hong Kong banks and insurers may even see revenue growth. However, if regulations are further tightened to cover existing Mainland customers, the impact would be more pronounced, representing a medium-term overhang.</div></div>

STAN

01299

HSBA

JPMorgan's report indicates that recent cross-border regulatory tightening in Mainland China and Hong Kong poses limited earnings risks to banks and insurers. The bank maintains an Overweight rating on HSBC, STANCHART, AIA, and FWD, expecting only minor impacts on revenue growth. The tightening primarily affects new Mainland customers, with projected revenue declines of less than 0.5% by 2028. However, if regulations extend to existing customers, the impact could be more significant.

- JPMorgan reported that regulators in Mainland China and Hong Kong have tightened enforcement on cross-border financial activities, affecting market sentiment towards Hong Kong financial stocks.  
- Despite the sentiment shift, the bank expects limited impact on fundamentals, maintaining its Overweight rating on several stocks, including HSBC and AIA.  
- The tightening measures could reduce wealth revenue CAGR for banks slightly, while potential future regulations might have a more significant medium-term impact on revenue for existing Mainland customers.

AASTOCKS News

Standard Chartered PLC

HSBC Holdings Plc

HSBC HOLDINGS

AIA Group

HSBC

STANCHART

Fullgoal CSI 800 Banks ETF

China Southern CSI Banks ETF

China Merchants CSI BANK AH Price ETF

E Fund CSI 300 Financials (ex Banks) ETF

Huaan CSI Banks ETF

Hwabao WP CSI Banks ETF

Hwabao WP CSI All Share Investment Banking & Brokerage ETF

GF Fund CSI HK Connect Financials(ex Banks) Thematic ETF

Yinhua CSI All Share Investment Banking & Brokerage ETF

HSBC Holdings plc ADRhedged

WP CSI Banks ETF

Guotai CSI All Share Investment Banking & Brokerage ETF

ChinaAMC CSI Banks ETF

ChinaAMC SSE Financials Sector ETF Initiating Fund

JPMorgan Chase

BOC HONG KONG

JPMORGAN CHASE & CO. 4.20% DEP SHS REPSTG 1/400TH PFD SER MM

JPMORGAN CHASE & CO. 6%NON CUM DEP SHS REP 1/400TH PFD SER EE

JPMORGAN CHASE & CO. DEP REP 1/400TH (5.75% NON CUM PFD DD)

JPMORGAN CHASE & CO. 4.625% DEP SH RE 1/400TH INT NO CU PF LL

JPMorgan Chase & Co.

JPMORGAN CHASE & CO. 4.55% DEP SHS REPSTG 1/400TH PFD SER JJ

JPMORGAN CHASE & CO. 4.75 DEP SHS REP 1/400 NCUM PFD SR GG

HSBC 5xShortSG241213

AIA-R

Bank of China

BANK OF CHINA

Bank Of China

JPM: Tougher Cross-border Regulation Poses Limited Earnings Risk to Banks and Insurers; Overweight Rating Reiterated on HSBC HOLDINGS, STANCHART, AIA, FWD