Jin10 data reported on April 10 that UBS published a research report stating that it has lowered the target price for Hong Kong Exchange (00388.HK) by 9% from HKD 351.8 to HKD 320, with a rating of "Neutral." The report mentioned that the Hong Kong Exchange will announce its Q1 2025 results on April 30, and the bank expects net profit and revenue after tax for the quarter to increase by 27% and 28% year-on-year, respectively. It expects net investment income (NII) to decrease by 14% year-on-year and by 3% quarter-on-quarter to HKD 1.16 billion. Considering the market activity and rising risk aversion since the beginning of the year, the bank has adjusted the average daily sales for the fiscal years 2025/26 upward by 9% and downward by 5% to HKD 159 billion and HKD 142 billion, respectively, which is below market expectations. The bank indicated that the rising expectations for US interest rate cuts will pose significant resistance to the HIBOR-driven NII, thus lowering the NII for the fiscal year 2025/26 by 10% and 19% to HKD 4.6 billion and HKD 3.8 billion, respectively, for the fiscal year 2025/26.

Just a few months ago, Wall Street's largest banks took turns warning that the record run of their largest source of revenue was coming to an end. Now, that concern seems to be gone. Following the release of the latest US CPI data, the Fed is widely expected to cut interest rates less than previously expected, which is positive for the outlook for interest margin income in the banking sector. Analysts expect some large banks to raise their 2024 net interest income (NII) outlook guidance in their Q1 earnings reports. JPMorgan Chase & Co. had previously estimated its annual NII of $90 billion, but this figure is now conservative, and the focus is no longer on whether the company will raise its forecasts, but by how much.