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2009-6-1 03:07:00 p.m. HKT, XFNA
DJ MARKET TALK: HSB +0.5%; Downward Pressure On P/B Premium - DB
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| 1455 [Dow Jones] Hang Seng Bank (0011.HK) +0.5% at HK$111.60, underperforming vs HSI's 3.4% gain, as stock may succumb to profit-taking soon after recent outperformance (HSB +28.2% in May vs Hang Seng Finance Subindex's +18.4%, HSI's +17.1% during same period). Deutsche Bank says still expects two key drivers of HSB's ROE premium (net interest margins and non-interest income) to be under severe pressure in FY09, FY10. "This could place downward pressure on its large P/B premium to peers," writes DB. Adds, views HSB's expansion away from mortgages into riskier loans as leaving it more exposed to credit cost risks. Keeps at Hold, while raising target to HK$95 vs HK$93; house raises FY09 net profit forecast by 1%, partly reflecting improved economic conditions. (SUT) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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