{I-bank focus}Goldman lifts BOCHK (02388) to HK$35.5

    Goldman Sachs lifted its target price for BOC Hong Kong (Holdings) (02388) to HK$35.5 from HK$34.9 and maintained its "buy" rating.
  The research house noted three key reasons to buy the stock.
  First, BOCHK has 2x the earnings sensitivity to short end or long term interest rates, but has performed in-line with the average Asian bank year-to-date. During the last Fed rate hike cycle, the bank saw a NIM beta to HIBOR of 0.2x, which would translate into 8% higher pro-forma 2022 EPS on a 50bp HIBOR move.
  Second, on similar forecasted ROE, BOCHK stock trades at 40% P/E and P/B discount to Hang Seng Bank (HSB) (00011). Goldman expects the same to narrow as the HK economy recovers, a phenomenon that has been witnessed historically. The share has high, positive correlation to UST 10y yield and a rally in the latter should support the shares.
  Third, it expects late March 4Q 2020 reporting to be positive for the stock. Goldman raised its brokerage and credit card fee income for BOCHK seeing encouraging trends at HSB, along with the expectation of continued recovery in cards as the economy recovers (and travel opens up), as well as noting the year-to-date strength in HKEX turnover volumes.