Recommended Stock：HSBC（5）
HSBC Holdings reported its third-quarter results for 2024, showing a revenue increase to $17 billion, up $800 million or 5% yoy, exceeding expectations. However, net interest income fell to $7.6 billion, a decrease of $1.6 billion compared to the previous year, with a net interest margin of 1.46%, down 24 bps yoy due to higher interest expense on liabilities because of higher interest rates. The profit before tax rose by $800 million to $8.5 billion, driven mainly by growth in wealth management and personal banking, as well as gains in foreign exchange, equities, and global debt market activities. The board approved a third dividend of $0.10 per share and plans to initiate a share buyback program of up to $3 billion, expected to be completed within four months before the full-year results announcement in February 2025. HSBC maintains its guidance from July 2024, with an average tangible equity return target of around 15% for 2025, despite rate cut cycle in the US. Target price: $80; Stop- Loss price: $65.
Fed official Goolsbee expects interest rates to be a ‘Fair Bit Lower’ Over Next Year
Chicago Federal Reserve President Austan Goolsbee reiterated on Thursday that he supports further interest rate cuts and is willing to slow down the pace of rate cuts. He said that inflation has declined over the past year and a half and is moving toward the Fed's 2% target, the labor market has cooled, and the economy is now close to stability and full employment. Therefore, about a year from now, interest rates should be "a fair bit lower than where they are today."
Hong Kong Stock Connect had a net inflow of HK4.66bn on Thursday of which Kuaishou (1024) had the largest net inflow, reaching HK$0.63bn; followed by Alibaba (9988). Sunac (1918) recorded the largest net outflow at 0.16bn, followed by Xiaomi (1810).
The Hang Seng Index opened slightly higher by 12 points, opening at 19,613 points, but fell 371 points or 1.89% throughout the day to 19,230 points; the H-Share Index fell 148 points or 2.1% to 6,887 points; the Hang Seng Technology Index fell 112 points or 2.6%. It was quoted at 4,246 points. The total daily turnover of the market was HK$158 billion. Baidu (9888) mentioned in a conference call that its fourth-quarter advertising revenue has not significantly recovered, and its stock price suffered a significant setback and fell 8.6%. It is rumored that Xiaomi (1810)'s second pure electric SUV will be launched from February to March next year, and its stock price rose 1.4%.
Source: KGI Investment Strategy
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After the U.S. presidential election, the Republican Party gained full control. Due to Trump's pre-election advocacy for American-made products, domestic manufacturing and procurement have the opportunity to boost transportation services focused on domestic demand, leading to a rise in related stocks. In China, retail sales data exceeded expectations, but...