UBS: Maintains "Neutral" rating for Hong Kong Exchange (00388), target price raised to HK$346.

UBS released a research report stating that considering recent market activities and their latest interest rate reduction views, the return of Trump to the White House is expected to lead the Fed to adopt a more moderate interest rate reduction path in the future. The earnings per share forecast for Hong Kong Exchanges and Clearing Limited (00388) for the years 2021 to 2026 have been raised by 1%, 3%, and 3% to HK$10.36, HK$9.83, and HK$10.12 respectively. The target price has been adjusted from HK$344 to HK$346, with a "Neutral" rating. The bank expects that the daily average turnover of the Hong Kong Exchange will remain strong in the near term for three reasons. First, investor disagreements over any additional policy stimuli in the Mainland may promote trading. Second, recent adjustments may provide more attractive entry points for investors. And third, foreign institutional funds are still significantly underweighted. The bank pointed out that the daily average turnover of the Hong Kong Exchange in October and the fourth quarter reached HK$255 billion and HK$238 billion respectively, an increase of 1.2 times and 1 time year-on-year. This year's revenue, southbound daily average turnover, and northbound daily average turnover are expected to reach RMB 131 billion, RMB 4.6 billion, and RMB 139 billion respectively, indicating daily average turnover for the remaining time of the year of RMB 139 billion, RMB 43 billion, and RMB 123 billion.