Morgan Stanley: HSBC HOLDINGS (00005) and STANCHART (02888) valuations are more attractive than their Singapore peers.

Morgan Stanley released a research report stating that Hong Kong banks are generally favored, and the valuations of HSBC HOLDINGS (00005)/STANCHART (02888) are more attractive than their Singapore peers, with Standard Chartered seen as having greater upside potential. Although net interest margin (NIM) has benefited from rising interest rates, the focus of discussion in the Hong Kong market is on the sustainability of short-term wealth and capital market growth momentum. The bank believes that balance sheet growth and capital markets are the next structural growth engines. Any pullback triggered by fund flows presents investment opportunities. Interest rates have once again become the focus, with investors noting the NIM gains brought by the Federal Reserve's recent rate hikes. At the same time, they are increasingly focused on the sustainability of non-net interest income (NII) growth, especially after the release of third-quarter results. The bank pointed out that Hong Kong banks are generally favored, with Standard Chartered seen as having greater upside potential. This is consistent with the bank's view that HSBC/Standard Chartered can benefit from improving balance sheet growth, cross-border fund flows, and the structural expansion of capital markets amid the ASIA FINANCIALization process, and their valuations are more attractive than their Singapore peers.