Bank of America Securities: Maintains a "buy" rating on Hong Kong Exchange (00388) with a target price of HKD 298.

Bank of America Securities released a research report stating that it maintains a "buy" rating for Hong Kong Exchanges and Clearing Limited (00388) and estimates that the imminent rate cut will have a positive impact on trading volume, with a target price of HK$298 for the Hong Kong Exchanges and Clearing Limited. However, Bank of America Securities cannot confirm whether the "additional" trading volume is coming from new funds from China or from southbound investors transferring shares from other internet companies to Alibaba. The bank believes that the short-term impact of a single stock on the overall market trading volume may still be limited. The bank pointed out that the fundraising scale for Hong Kong IPOs in the first eight months of this year remains sluggish, down 5% year-on-year to approximately HK$19.8 billion. During this period, a total of 43 companies were listed through IPOs, compared to 39 in the same period last year. Although the recent large IPOs from the mainland in September and the expected IPOs in the fourth quarter of this year are expected to result in a total fundraising scale surpassing last year's level of HK$46 billion, the bank expects the total fundraising scale to reach HK$90 billion this year, still lower than the levels of HK$105 billion in 2022 and HK$300-400 billion in 2018 to 2021. The report states that the recent or upcoming large IPOs are all from the mainland. In most cases, the issuing companies are already listed on the A-share market, and the issuance of H-shares by related companies may lead investors to shift from the A-share market to the Hong Kong market due to valuation differences and exchange rates, contributing slightly to the trading volume in the Hong Kong market. Although the mainland encouraged more leading companies to list in Hong Kong in April, there have been no new IPO announcements from large Chinese companies since the IPO disclosures last year. Regarding Alibaba-SW (09988) joining the Stock Connect on September 10, in the first four trading days, aside from the higher trading volume on the first day, accounting for 4% of the total trading volume in Hong Kong or 24% of the total southbound trading volume, Alibaba's Stock Connect trading volume accounted for 1% to 2% of the total trading volume in Hong Kong or 6% to 13% of the total southbound trading volume, consistent with the bank's forecast in May.