Core Viewpoint - The Hong Kong interbank offered rate (HIBOR) has experienced a significant increase, with the overnight rate rising by 144 basis points to 3.37%, marking the largest single-day increase since December 2023. This upward trend in HIBOR rates is observed across various maturities, particularly the one-month HIBOR, which has risen for six consecutive days, surpassing the 3% level to reach 3.24% [1][3]. Interest Rate Movements - The one-month HIBOR has increased for six days, currently at 3.2428%, up by 26.51 basis points from the previous day. The overnight rate has surged by 144.04 basis points to 3.36905%, the highest single-day increase since December 2023. Other short-term rates have also seen slight increases, while six-month and one-year rates have decreased slightly [3]. - The rise in market interest rates has led to adjustments in bank deposit rates, with at least eight banks reversing previous rate cuts. Analysts attribute these fluctuations to factors such as quarter-end funding demands, inflows from the Hong Kong Stock Connect, and bank liquidity management [3]. Foreign Investment Outlook - UBS forecasts a 15% upside potential for global equities by the end of 2026, with a strong preference for Chinese technology stocks, anticipating a 37% growth in corporate earnings by 2026. The firm also expects double-digit growth for the Hang Seng Index [1][5][6]. - The investment outlook for 2024 suggests a slowdown in the global economy without a recession, with the U.S. economy projected to grow by 1.7% for the year. UBS anticipates interest rate cuts from the Federal Reserve in December and early 2024 due to slowing inflation [5]. AI and Technology Sector - AI is expected to continue driving global stock markets, with capital expenditures on AI projected to reach $4.7 trillion by 2030. The current contracts signed amount to $2.4 trillion, indicating strong growth potential in this sector [5][6]. - The financial health of leading AI companies is noted to be robust, with many having healthy balance sheets and positive cash flows, which contrasts with the tech bubble of the past. This positions them well for future growth [6]. Investment Strategy - Given the anticipated market volatility in 2024, UBS recommends diversifying investments across stable assets such as private equity, bonds, and hedge funds. Additionally, the firm suggests allocating at least 5% of investment portfolios to commodities like gold, with a potential peak price of $4,900 per ounce during economic turbulence [7].

Group 1 - The core viewpoint of the report indicates that the Hong Kong 1-month HIBOR has reached 2% for the first time since May, with an average of approximately 1.1% from August to date, and averages of 0.7% and 1% in June and July respectively [1] - Goldman Sachs forecasts that the average HIBOR will reach 1.3% and 1.6% in August and September, with averages of 1.3% and 2.3% in the third and fourth quarters, compared to 3.9% and 2% in the first and second quarters [1] - Despite the downward trend in HIBOR since May affecting banks' net interest margins, Hong Kong bank stock prices remain resilient as the market appears to have absorbed the positive factors of lower HIBOR, including increased fee income, reduced credit costs, and a recovery in loan demand [1] Group 2 - Goldman Sachs maintains a selective strategy, assigning a "Buy" rating to HSBC Holdings with a target price of HKD 110, while giving a "Sell" rating to Bank of East Asia with a target price of HKD 10.5 [1]