Stock investors are in danger of missing a buying opportunity from the recent surge in Hong Kong’s interbank rates, according to Goldman Sachs Group Inc.
(Bloomberg) — Stock investors are in danger of missing a buying opportunity from the recent surge in Hong Kong’s interbank rates, according to Goldman Sachs Group Inc.
“The market is missing an expected improvement in net interest margins” as lender’s shares have not reacted to the higher rates, analysts including Gurpreet Singh Sahi wrote in a Thursday note. Still, delivery from banks is key given their first-quarter miss on margins, they added.
The overnight Hong Kong interbank offered rate, known as Hibor, jumped to a 16-year high on Thursday amid tightening liquidity conditions after the city’s repeated currency intervention to support the local dollar.
Stocks of some local lenders, such as BOC Hong Kong Holdings Ltd. and Hang Seng Bank Ltd., have fallen from recent peaks, outpacing losses in the broader Hang Seng benchmark index.
Goldman affirms their buy ratings on HSBC Holdings Plc and BOC HK, the analysts wrote in the note, with price targets implying more than 30% upside from current levels.
–With assistance from Chester Yung.
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