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2026-06-29 11:42:44 China's new measures to step up scrutiny over cross-border capital flows are aimed at enhancing compliance oversight of the capital account rather than managing the RMB exchange rate, HSBC Global Investment Research said in a report. The direct impact on banks’ core businesses is expected to be limited, and the outlook for fee income and NII remains resilient. However, insurers face greater uncertainty and potential volatility. With tighter regulatory rules, insurance sales may be curtailed. The broker expected authorities to provide further guidance in the future, particularly regarding insurance sales, distribution and enforcement. HSBC Global Investment Research maintained its Buy rating on BOC HONG KONG (02388.HK) with a TP of HKD53.2. It noted that wealth management income accounts for only 8% of its total revenue in 2025, while brokerage fees, FX-related fees and loan demand remain resilient, underpinned by corporates’ overseas expansion. In addition, easing expectations of rate cuts are favorable to BOC HONG KONG’s NII outlook. Reduced liquidity inflows into Hong Kong may lift HIBOR, benefiting banks through NIM expansion. Since the announcement of the new regulations, AIA (01299.HK) has ebbed cumulatively by 16.1%, while HKEX (00388.HK) has shrunk by 10.5%. HSBC Global Investment Research said Southbound Trading remains stable with no evident net outflows. HKEX’s share price weakness likely reflects market concerns that slower capital inflows could affect wealth product distribution. However, the broker believed the new rules have only a mild impact on HKEX’s operations, as it mainly relies on regulator-approved Stock Connect channels. It maintained a Buy rating on HKEX with a TP of HKD528. As for AIA, the broker noted that insurance business from mainland visitors to Hong Kong contributes about 20% of its 2025 new business value. Under tighter regulation, growth momentum may slacken. A Hold rating was maintained with a TP of HKD81. ~ AASTOCKS Financial News Website: www.aastocks.com | |