[ET Net News Agency, 13 March 2018] Morgan Stanley lifted its target price for Hang
Seng Bank (HSB)(00011) to HK$240 from HK$220, and reiterated its "overweight" rating.
The research house said HSB has been a good investment in the last five years. It has
one of the strongest balance sheets across Asian banks (16% CET1 ratio, 70% loan-deposit
ratio; >200% liquidity coverage ratio). Despite high CET1 and low rates, it has generated
ROCET1 of 20%. This helped generate a 15% total return CAGR over the last five years.
The outlook continues to improve: HIBOR has increased, but lagged LIBOR, driven by
strong liquidity inflow into HK. It's tough to predict when this inflow will abate,
keeping the HIBOR-LIBOR gap wide. The positive, however, is that HIBOR is also inching up.
Fed futures imply that Fed rates will almost double by end-2019, to 2.5%. Even if the
HIBOR gap stays, HIBOR will rise, driving up deposit spreads. This should drive NIM
expansion of 15bps in both 2018 in 2019, Morgan said. (KL)
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00011 HANG SENG BANK
Nominal 
102.300 +0.700 (+0.689%) Others
13/03/2018 17:55
[I-bank focus]Morgan lifts Hang Seng Bank (00011) to HK$240
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