CIHKY CHINA MERCHANTS BK
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CHINA MERCHANTS BK News
China: Consumer goods in the Mainland could lead to GDP growth by 0.3 percentage points, or increase household appliance sales by 15%
China's Ministry of Finance issued a notice on “Certain Measures to Support Large-Scale Equipment Upgrades and Replacement of Consumer Goods” by the National Development Reform Commission and the Ministry of Finance. Proposed the coordination of around RMB 300 billion (below) in ultra-long term special government debt financing, and strongly supported large-scale equipment upgrades and the replacement of old consumer goods. This indicates a further decline in positive fiscal policy, which the Bank expects could drag down GDP growth by around 0.3 percentage points.
Morgan Stanley: Focus on managing net interest spread as internal banks confirm lowered deposit rates.
JPMorgan released a report stating that the announcement by six large state-owned banks of a reduction of deposit interest rates on the previous day (25th) was not unexpected, based on earlier media reports. The bank reiterated its positive view on China mainland banking, based on the narrowing net interest margin gap of two basis points resulting from the reduction of deposit interest rates and loan market quote rates (LPR), which is estimated to increase the bank's earnings by 2% next year. The rapid reduction of deposit interest rates also confirms the bank's view that regulatory authorities and banks are more focused on stabilizing the net interest margin. The bank believes that future interest rate cuts will be symmetrical, and the reduction of deposit interest rates will be accompanied by a reduction in LPR. The bank also noted that regulatory authorities are cracking down on banks' artificial intervention in interest rates, including deposits.
Hang Seng Index rose 28 points in half a day, with electronic related stocks being popular. Eastbuy fell 21%.
The US economy grew better than expected in Q1. The Dow rose more than 500 points the night before (25th) and closed up 81 points or 0.2%. Hong Kong stocks rebounded with the external market in the morning, and the Hang Seng Index opened high with 74 points, rose 224 points in the initial stage, saw 17,229 points and then fell back. It had previously fallen as much as 80 points to 16,924 points and then rose 28 points or 0.17% in the morning and reported 17,033 points. The national index fell 4 points or 0.1%, reported 6,012. The Hang Seng Technology Index rose 22 points or 0.7%, reported 3,443. The total turnover of the market in half a day was 60.193 billion yuan. The net inflow of Shanghai, Shenzhen and Hong Kong Stock Connect transactions was 2.42 billion and 14.88 billion respectively.
HSBC Research: Lowering deposit rates for domestic banks is a surprise. Preferential construction bank (00939.HK), industrial and commercial bank (01398.HK), Bank of China (03988.HK), China Merchants Bank(03968.HK) and HKEX (00388.HK).
HSBC Research has published a research report indicating that major banks in mainland China have recently lowered deposit rates, causing surprise. Although current deposit rates are already low, there is still room for further reduction, and the reduction in interest rates for fixed-term deposits of 2 to 5 years exceeds the reduction in LPR. Therefore, it is expected that the cost of transferring the reduction in LPR to deposit costs may increase from the originally expected 25% to close to 50% to 100%. Assuming a transfer rate of 50%, the bank's net interest margin (NIM) is expected to be affected by approximately 1 to 2 basis points, or a reduction in profit of 1% to 2.3%. If the transfer rate is 100%, the impact on the bank's NIM and profit will be more severe due to a greater proportion of deposit balances subject to the reduced interest rates.
Government bond futures hit a new historic high yesterday. Analysis suggests the fundamental aspects of the market still support a further decline in bond yields.
According to a report from the Shanghai Securities News, the national bond futures hit a new historic high following the news of a state-owned bank lowering deposit rates and the central bank lowering MLF operational rates by 20 basis points. Yesterday (25th), the main contract for the 30-year national bond futures rose by 0.4%, setting a new closing high, while the main contract for the 10-year national bond futures fell slightly but still reached a historic high during the trading day. Analysts believe that although short-term interest rates have significantly declined after the interest rate cut, long-term interest rates remain relatively restrained, but fundamental factors still support further declines in bond yields. In the current market sentiment and policy environment, institutions suggest that investors be cautious in bond investment and avoid excessive operations.
Starting from today, cm bank (03968.HK) will decrease its deposit interest rate.
CM Bank (03968.HK) (600036.SH) announced that the bank has adjusted its deposit rates today (26th). After the adjustment, the interest rate for three months is 1.05%, six months is 1.25%, one year is 1.35%, two years is 1.45%, three years is 1.75%, and five years is 1.80%. Compared to before, the interest rates for fixed deposit accounts of one year or below were reduced by 10 basis points, while those for two, three, and five years were reduced by 20 basis points.
Express News | cm bank lowers deposit listing rate.
Express News | Following the joint-stock banks, cm bank will lower its deposit listed interest rates on July 26, with the maximum reduction being 20 basis points.
Hang Seng Index fell by 306 points, Meituan dropped more than 5%, and resource and energy stocks were weak.
The USD/JPY exchange rate fell to the edge of 152, triggering a global stock market decline due to arbitrage trading and unwinding. As for the Hong Kong stock market, the Hang Seng Index opened low by 50 points and the decline expanded. It fell to 16,964 points after a drop of 346 points, and closed at 17,004 points, a decrease of 306 points or 1.8% for the whole day. The national index fell 125 points or 2.1%, closing at 6,016 points. The Hang Seng Tech Index fell 69 points or 2%, closing at 3,421 points. The total turnover of the market for the day was HKD 105.734 billion, with a net outflow of RMB 0.36 billion and 1.64 billion in the southbound trading under the Shanghai and Shenzhen-Hong Kong Stock Connect. The chip equipment manufacturer ASMPT (00522.HK) fell after its performance announcement yesterday.
Hang Seng Index fell below 17,000 in the afternoon, hitting a three-month low, while Meituan declined more than 6%. Local stocks outperformed Evergrande and reached a nearly two-year high in energy.
Dragged down by heavyweight technology stocks such as 'Amazing Seven Heroes', the three major stock indices in the US fell significantly on the night of the 24th; the VIX index, which reflects the market panic, surged 22.6%. Stimulated by the increase in global arbitrage trade liquidation, the yen continued to rise to a two-and-a-half-month high, rising 1% at its highest to 152.22 against the US dollar. Safe-haven sentiment has risen sharply, and major stock markets in the Asia-Pacific region fell across the board today (25th), with the Nikkei index closing down 1,285 points or 3.3%. Following the decline in the past two days, the Hong Kong stock market fell below the 17,000 mark in the afternoon, dropping 335 points at its lowest to a three-month low of 16,975, and is currently reporting 17,010, continuing its decline by 300.
Citi: Maintains buy rating on cm bank (03968) with target price of HK$41.52
Citigroup will include CM Bank (03968) in its 30-day negative observation and negative catalyst observation.
A new round of deposit "rate cuts" has begun: the six major banks have jointly lowered interest rates, and small and medium-sized banks will soon follow suit. Experts warn that we need to be cautious of the problem of attracting deposits.
The six major state-owned banks collectively announced a reduction in deposit interest rates. Compared with the previous two adjustments, the reduction this time has been slightly weakened, but the coverage is wider, and the current deposit interest rate is included in the scope of the reduction. Experts believe that the trend of deposit regularization has eased recently. After the new round of deposit interest rate reduction starts, other banks will follow suit and adjust; looking forward, there is still a possibility of further reduction in domestic deposit interest rates.
Express News | The recent banks' deposit interest rate cuts are conducive to stabilizing banks' liabilities and reducing costs, bullish for corresponding stocks' valuations.
"Dahang" Citigroup expects China Merchants Bank (03968.HK) to fall short of second-quarter net profit expectations, difficult to prove the rationality of the valuation premium.
Shares of CM Bank (03968.HK) fell nearly 4.6% to HKD 31.8 this morning. Citigroup released a report that included CM Bank (03968.HK) in its 30-day negative observation and negative catalyst observation, citing that the bank's shares have risen by 32% since the beginning of the year, outperforming the four state-owned commercial banks, which have risen between 20% to 27% during the same period. Part of the reason is due to the support policies for mainland real estate, and CM Bank is considered the highest quality representative among China mainland banking shares involved in the real estate business. Citigroup expects the bank's mid-term net profit to drop by 1.5% yearly and estimates that it will decline in the second quarter of this year.
Hong Kong stocks fluctuate | CM Bank (03968) falls more than 4%, leading the decline in China Mainland Banking. The central bank optimizes the interest rate system, but the interest rate spread of banks still continues to narrow.
China mainland banking stocks continued to decline in the morning session. As of press time, CM Bank (03968) fell 4.2%, to HKD 31.95; Minsheng Bank (01988) fell 3.94%, to HKD 2.68; Bank of Communications (03328) fell 2.93%, to HKD 5.64; and China Construction Bank Corporation (00939) fell 2%, to HKD 5.39.
The six major banks collectively announced a reduction in deposit interest rates, the highest being a decrease of 20 basis points. Experts believe that stabilizing the cost of debt will have limited impact on ordinary depositors.
On July 25th, the six major state-owned banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank, collectively lowered the deposit interest rates of RMB, with a reduction range of 5 to 20 basis points. Experts believe that this adjustment is based on the previous decline of the 1-year LPR and the trend of market interest rates such as the national bond yield that the six major banks have autonomously decided to make. The interest rate adjustment is conducive to stabilizing the cost of liabilities, promoting investment and consumption, but it is expected to have limited impact on ordinary depositors.
Expert: Unexpected increase in MLF operations meets the medium- and long-term fund needs of financial institutions.
The People's Bank of China announced today (25th) the one-year MLF operation of CNY 200 billion through interest rate auction, with the winning interest rate down 0.2 percentage points from the previous time to 2.3%. This is the second MLF operation conducted by the People's Bank of China this month, and the MLF interest rate has been lowered for the first time since August 2023. This increased MLF operation meets the medium and long-term funding needs of financial institutions. According to expert sources cited by The Paper, with the upcoming end of the month, the liquidity demand of financial institutions has significantly increased, and there is some upward pressure on the interest rates in the currency market, with some institutions participating in the MLF.
Mainland China banking stocks in Hong Kong generally fell, with CM Bank's stock dropping by 3%.
On July 25th, CM Bank fell by 3%, Minsheng Bank fell by 2.5%, CEB Bank, Postal Savings Bank of China, and China CITIC Bank Corporation all fell by over 1.5%.
Citi: Initiated a 30-day positive catalyst watch on Agricultural Bank of China (03618.HK), and negative catalyst watches on Bank of Communications (03328.HK) and China Merchants Bank (03968.HK).
According to Citigroup's report, as a theme of income-generating investment, China mainland banking has been the best-performing sector in the A-share market so far this year, with a 21% increase from the beginning of the year, compared to only a 2.3% increase in the CSI 300 index. Among them, regional banks with convertible corporate bonds have performed particularly well, as the management is incentivized to release profits by converting convertible corporate bonds or supplementing capital, thereby driving profit growth faster than peers. Citigroup has initiated a positive catalyst observation for CQRC Bank (03618.HK) for the next 30 days, and a negative catalyst observation for Bank of Communications (03328.HK) and China Merchants Bank (03968.HK).
Goldwind Science & Technology Sells 750 Million Yuan of 159-Day Bonds
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