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2009-5-22 02:31:00 p.m. HKT, XFNA
DJ MARKET TALK: Hong Kong Banks Not Yet Back To Sunny Days - MS
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| 1414 [Dow Jones] Morgan Stanley says Hong Kong banks enjoy "a bit of sunshine, but for how long?" Notes sector's strong performance over last 2 months, underpinned by belief economy recovering, NPLs will be low, potential for greater access to China. Still, while worst of slowdown probably behind, says "it is not back to the sunny days that the stocks seem to be pricing in." Expects earnings will be weak well into 2010, revenue progression will be muted, credit costs will likely remain higher than normalized levels. Recommends cheap mid-sized bank Dah Sing Financial (0440.HK), which gains from lower Hibor; ICBC Asia (0349.HK), which likely to benefit from lower HIBOR, possible privatization; also well-capitalized, profitable Hang Seng Bank (0011.HK). (RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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