＜Research＞CLSA: PBOC Optimises Interest Rate System; ABC & CCB Preferred Among CN Bank H-shrs

　　CLSA noted in a report that the PBOC had earlier announced a rate cut, in which the 1-year and 5-year LPRs were reduced by 10 bps, reflecting the central bank's optimisation of the interest rate system. The broker expected more actions to be taken by the PBOC, in sectors such as LPR and deposit pricing, to optimise interest rate transmission. The broker believed there would be more room for the PBOC to cut rates in the future after the US started its rate cut cycle, which could lead to a decline in Chinese banks' net interest margin (NIM).

　　CLSA expected lower LPRs to challenge NIMs in 2H24 and into 2025. However, in the longer term, better transmission means a better match between Mainland banks' asset yields and the cost of their liabilities, allowing the banks to manage their NIMs more effectively. According to PBOC, the purpose of the rate cut is to strengthen support for the real economy.

　　Related NewsCiti Lists CN Stock Themes Potentially Benefitting From Policies at 3rd Plenum (Table)

　　CLSA believed that a 10 bps rate cut would not be enough and was concerned about policy upgrades. The broker is bullish on H-shares of ABC (01288.HK) +0.080 (+2.312%) Short selling $71.31M; Ratio 30.426% and CCB (00939.HK) +0.040 (+0.730%) Short selling $232.16M; Ratio 34.080% , taking into account dividend returns and full-year earnings stability.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-24 12:25.)

　　AAStocks Financial News