＜Research＞HSBC Research: PBOC Cuts LPRs for 1st Time under New Framework; HKEX, CCB, BOC, CMB Recommended

　　The People's Bank of China (PBOC) cut loan prime rates (LPRs) for the first time under the new framework, HSBC Global Research said in its report. The broker expected HKEX (00388.HK) -0.600 (-0.251%) Short selling $228.26M; Ratio 24.678% and brokers to benefit more from the low interest rate environment. China banks will face pressure from net interest margins (NIMs), but the low interest rate environment may mean more attractive dividend yields. The dividend yields of H-share China banks range from about 7% to 9%. Among financials in Greater China, the broker preferred HKEX, CCB (00939.HK) +0.060 (+1.107%) Short selling $453.83M; Ratio 29.943% , BANK OF CHINA (03988.HK) +0.050 (+1.462%) Short selling $251.76M; Ratio 31.601% and CM BANK (03968.HK) +0.400 (+1.194%) Short selling $143.24M; Ratio 24.032% , all of which were rated Buy.

　　HSBC Global Research opined that loan growth forecasts for 2025 and 2026 may be at downside risk. The PBOC also recently de-emphasized reference to the size of loan growth as an indicator of the financial sector's value-added to the economy, and discouraged interbank financing activities that did not offer genuine value to the economy. This change is likely to reduce banks' capital consumption, leading to a more sustainable dividend payouts.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-22 16:25.)

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