PBoC and Hong Kong Monetary Authority Announce 11 Measures on July 7, Boost RMB Funding to 500B Yuan

According to a Goldman Sachs report, on July 7, the People's Bank of China, Hong Kong Monetary Authority, and Securities and Futures Commission announced 11 measures to deepen financial cooperation between Hong Kong and mainland China. Key measures include increasing the total RMB business funding arrangement from 200 billion yuan to 500 billion yuan, with six measures targeting Hong Kong's fixed income and currency markets and five focused on developing offshore RMB business.

Goldman Sachs initiated "buy" ratings on Bank of China (Hong Kong) (02388), Standard Chartered Bank (02888), and HSBC Holdings (00005), while rating East Asia Bank (00023) as "sell." The firm views the measures as structurally positive for Hong Kong banks overall, particularly benefiting Bank of China (Hong Kong) as the sole RMB clearing bank in the city, with potential to increase RMB clearing and settlement activity and fee income.