Understanding the Market | Hong Kong bank stocks rose in the afternoon, with BOC Hong Kong up over 5% and Hang Seng Bank currently up nearly 4%

Hong Kong bank stocks rose in the afternoon. As of the time of writing, BOC Hong Kong was up 5.1%, trading at HKD 26.8; Hang Seng Bank rose 3.56%, trading at HKD 103.2; STANCHART increased by 2.36%, trading at HKD 108.5; and HSBC HOLDINGS was up 0.54%, trading at HKD 84.25. Morgan Stanley released a research report stating that Hong Kong bank stocks are about to announce their fiscal year 2024 financial reports, with expectations that HSBC and STANCHART's reports will focus on maintaining return on equity (ROE) capabilities, with HSBC potentially releasing more capital. The bank indicated that a stable ROE outlook will support bank stock prices, while capital remains a focus for local banks, but weak operational prospects will limit stock performance. Jefferies released a report noting that highly leveraged property companies account for about 16% of the total commercial real estate loans of Hong Kong banks, highlighting the need to be cautious about related provisioning risks. The bank pointed out that BOC Hong Kong, Bank of East Asia, and Hang Seng Bank are listed as the main partner banks for eight high-risk property companies, while United Overseas Bank is involved in financing for five property companies. Jefferies specifically noted that highly leveraged property companies collectively account for 16% of commercial real estate loans, with 20%-30% of loans across the industry potentially facing rating downgrades