Daily Investment Strategy
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: $66.
Labor market demand cools, but consumer confidence soars
The JOLTS job openings data, which measures labor demand, unexpectedly fell to 7.443 million in September from 7.861 million in August. More clues about the job market will continue to come into focus with initial jobless claims and the ADP, or private payrolls, due out later this week, as well as October non-farm payrolls due on Friday. Meanwhile, despite uncertainty about the election outcome, the consumer confidence index jumped to 108.7, the highest level since 2021.
Hong Kong Stock Connect had a net inflow of HK6.75bn on Tuesday of which Alibaba (9988) had the largest net inflow, reaching HK$1.77bn; followed by HSCEI ETF (2828). CNOON (883) recorded the largest net outflow at HK$0.32bn, followed by China Mobile (941).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.
