HK Stock Market Move | Interest rate hike expectations are heating up, and Hong Kong banks are expected to see an expansion in net interest margins. Dah Sing Banking (02356) and Bank of East Asia (00023) have both risen by nearly 7%.

Hong Kong bank stocks rose against the market trend. As of the deadline for this article, Dah Sing Banking (02356) rose by 6.94% to HK $13.86, Bank of East Asia (00023) rose by 6.74% to HK $15.04, and BOC Hong Kong (02388) rose by 4.22% to HK $50.4. On the news front, due to the rise in oil prices, US Treasury yields have risen to the highest level of the year. The market expects the Federal Reserve to possibly raise interest rates as early as next week. Traders' latest estimates indicate a 31% probability of a 25-basis-point rate hike at the Fed's policy meeting next week, while the probability of rates remaining unchanged is 69%. It is reported that in an environment of rate hikes, net interest margins are expected to widen, which may benefit the profitability of Hong Kong banks. Huatai had previously pointed out that since the beginning of the year, foreign investors have increased their allocations to the financial sector of Hong Kong stocks as a whole, and the bank suggests taking advantage of the revaluation opportunities in Hong Kong banks. In the next stage, attention should be focused on the recovery of Hong Kong's economic fundamentals and the potential for performance improvement brought about by stable interest rate spreads.