<div id="readability-page-1"><div>JPMorgan issued a research report noting that since the announcement of the new Offshore Direct Investment (ODI) rules on June 1, the share prices of HSBC HOLDINGS (00005.HK) -1.600 (-1.183%) Short selling $1.02B; Ratio 21.184% and STANCHART (02888.HK) -4.500 (-2.377%) Short selling $27.82M; Ratio 5.594% have cumulatively adjusted by 8% and 10%, respectively, underperforming the HSI by 4 ppts and 6 ppts. This may reflect investor concerns over growth prospects and Mainland Chinese Visitor (MCV) stock business following the new rules. However, during client meetings in Shanghai, Mainland investors expressed surprise at the pullback and maintained a more optimistic view on regulatory risks, believing the impact of the new rules should be controllable.JPMorgan pointed out that media reports cited a Hong Kong Securities and Futures Commission spokesperson as saying that licensed institutions may continue to open new accounts and provide services to Mainland investors subject to compliance requirements, helping to ease regulatory ambiguity. The bank estimates, under a higher-end assumption, that MCV business contributes only a mid- to high-single-digit percentage of earnings for HSBC HOLDINGS and STANCHART, suggesting disruptions from the ODI rules should be manageable. Although uncertainty surrounding medium-term growth guidance may keep investors on the sidelines temporarily, if the cumulative adjustment since June 1 reaches the mid-teens ppts within a 10% to 20% range, it would represent an attractive buying opportunity, all else being equal.The bank noted that in FY2025, Hong Kong wealth management contributed 7.6% and 6.6% of group revenue for HSBC HOLDINGS and STANCHART, respectively. Assuming 20% to 40% of Hong Kong wealth management revenue is derived from MCV, MCV would account for approximately 3% to 6% of group earnings for HSBC HOLDINGS and 4% to 8% for STANCHART. JPMorgan reiterated its Overweight rating on both HSBC HOLDINGS and STANCHART, maintaining TP at HKD182 and HKD275, respectively. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-10 16:25.)</div></div>

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JPMorgan reiterates Overweight ratings on HSBC and STANCHART, stating the impact of new ODI rules is controllable. Despite recent share price underperformance driven by investor concerns over Mainland Chinese Visitor business, JPM estimates MCV contributes only 3-8% to group earnings. The bank views a mid-teens percentage pullback as an attractive buying opportunity, maintaining target prices of HKD182 for HSBC and HKD275 for STANCHART.

- JPMorgan reported that share prices of HSBC HOLDINGS and STANCHART have fallen 8% and 10%, respectively, since new Offshore Direct Investment (ODI) rules were announced, underperforming the Hang Seng Index.  
- Despite investor concerns about growth and the Mainland Chinese Visitor (MCV) stock business, Mainland investors expressed optimism during meetings in Shanghai, believing the new rules' impact is manageable.  
- JPMorgan estimates MCV business contributes a small percentage of earnings for both banks and maintains an Overweight rating on them, suggesting current price adjustments may present buying opportunities.

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JPM: Impact of New Rules on HSBC HOLDINGS  and STANCHART Controllable; Reiterates Overweight