UBS keeps Buy rating for HKEX, with target price of HK$480

 

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UBS believed mutual market access with mainland China would remain a major investment theme for the Hong Kong Exchanges and Clearing (HKEX) and recent key developments include the ETF Connect and the Swap Connect.

HKEX’s asset classes are expanding towards fixed income and currency-related products, conducive to revenue source diversification and this could bolster HKEX’s resilience further and support a valuation premium to global fellows, the bank said.

UBS lowered HKEX’s 2022 earnings estimate by 2% to mainly reflect market movements and it expected the HKEX’s interim revenue to be underpinned by HIBOR uptick, as HKEX’s main investment income is interest rate-driven and will become more visible in 2H22.

Overall, HKEX was kept Buy at a target price of HK$480.