High Interest Rates Thwart Leading Hong Kong Broadband Company Earnings
Portfolio Pulse from Daniel Harrison
Hong Kong Broadband Network (HKBN Ltd.) has issued a profit warning, expecting a loss of HK$1.3 billion ($167 million) for the year ending August 2023 due to rising interest rates. The Hong Kong Interbank Borrowing Rate (HIBOR) has surged by over four times in 2023, increasing borrowing costs. This rise in HIBOR could impact earnings of property developers like China Evergrande Group, Country Garden Holdings Company Limited, and Longfor Holdings Group Limited, and companies with high borrowing rates like Swire Pacific Ltd. and New World Development Co Limited.
October 09, 2023 | 7:25 pm
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POSITIVE IMPACT
HSBC reported that the HIBOR average is 3.95% vs. just 0.77% for the same time last year. The rise in HIBOR could increase HSBC's interest income.
HSBC, as a major bank, could benefit from higher interest rates as it would increase their interest income.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
The rise in HIBOR could negatively impact the earnings of Country Garden Holdings Company Limited as increased mortgage rates could deter new home buyers.
Country Garden Holdings, as a property developer, could be negatively impacted by the rise in HIBOR as it could deter new home buyers due to increased mortgage rates.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The rise in HIBOR could negatively impact the earnings of China Evergrande Group as increased mortgage rates could deter new home buyers.
China Evergrande Group, as a property developer, could be negatively impacted by the rise in HIBOR as it could deter new home buyers due to increased mortgage rates.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The rise in HIBOR could negatively impact the earnings of Longfor Holdings Group Limited as increased mortgage rates could deter new home buyers.
Longfor Holdings, as a property developer, could be negatively impacted by the rise in HIBOR as it could deter new home buyers due to increased mortgage rates.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The rise in HIBOR could negatively impact New World Development Co Limited as it could increase their borrowing costs.
New World Development Co Limited, as a company with high borrowing rates, could be negatively impacted by the rise in HIBOR as it could increase their borrowing costs.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The rise in HIBOR could negatively impact Swire Pacific Ltd. as it could increase their borrowing costs.
Swire Pacific Ltd., as a company with high borrowing rates, could be negatively impacted by the rise in HIBOR as it could increase their borrowing costs.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80