HK Stock Market Move | STANCHART (02888) falls by nearly 5%, JP Morgan expects escalating Middle East conflict may lead to significant pullback in group stock price

STANCHART (02888) fell almost 5%, reaching a 4.89% decrease with a trading price of 188.8 HKD, with a trading volume of 1.58 billion HKD at the time of writing. On the news front, a JP Morgan research report pointed out that the escalation of military conflicts in the Middle East has heightened market risk aversion sentiment, and it is expected that STANCHART, which has a high exposure in the region, will experience a larger scale of pullback. The report stated that Standard Chartered Bank's revenue share in the UAE will reach 5.6% by 2025, with around 73% of its loans in the UAE facing the government, public institutions, or banks by the second quarter of 2025. The bank believes that its credit risk is generally manageable. In terms of performance, UBS stated that STANCHART's pre-provision operating profit for the fourth quarter of 2025 was lower than expected by 11%, or $182 million, although net interest income exceeded expectations by 8%. However, the bank has warned investors not to consider this outperformance as the norm. The gap in pre-provision profit is largely attributed to one-time projects in operational expenses, and about one-third comes from inventory losses in trading business, both of which will not impact future earnings per share forecasts.