Group 1 - Hong Kong bank stocks rose in the afternoon, with Standard Chartered Group up 4.09% to HKD 147.7, East Asia Bank up 2.32% to HKD 12.78, HSBC Holdings up 1.96% to HKD 98.9, and Hang Seng Bank up 1.77% to HKD 115.1 [1] - HSBC and Hang Seng reported better-than-expected first-half results, with Standard Chartered and HSBC's non-interest income showing strong performance, supporting revenue growth [1] - However, overall risks in the Hong Kong banking sector remain, with low HIBOR leading to a decline in interest margins, negatively impacting net interest income in Q2 [1] Group 2 - Local loan demand in Hong Kong remains weak, with both Standard Chartered and HSBC experiencing a quarter-on-quarter contraction in local loans in Q2 [1] - The non-performing loan ratio in Hong Kong's commercial real estate sector has increased quarter-on-quarter, indicating ongoing pressure in the real estate industry [1] - On August 6, the Hong Kong Monetary Authority intervened by buying HKD 8.439 billion due to the HKD/USD exchange rate touching the weak end of the peg, marking the fourth intervention in seven days [1]

Core Viewpoint - Citigroup anticipates that the Hong Kong Monetary Authority may intervene immediately when the Hong Kong dollar reaches the weak end of its convertibility zone, projecting that the Hong Kong dollar will rise to the mid-level of this zone in the second half of the year, with the USD/HKD expected to be at 7.8 by year-end [1] Summary by Relevant Categories - **Currency Intervention**: Citigroup believes that the Hong Kong Monetary Authority is likely to take immediate action when the Hong Kong dollar approaches the weak end of its convertibility zone [1] - **Future Projections**: The expectation is that the Hong Kong dollar will strengthen to the mid-level of the convertibility zone in the latter half of the year, with a year-end forecast of USD/HKD at 7.8 [1]