Hong Kong-listed banking shares extended their downward trend.

At the time of writing, Standard Chartered (02888) shares were down 5.58% to HK$187.8. HSBC Holdings (00005) shares fell 3.8% to HK$136.7. BOC Hong Kong (02388) shares declined 2% to HK$46.94, while Bank of East Asia (00023) shares dropped 1.05% to HK$13.21.

Regarding recent market focus on mainland investors opening accounts with Hong Kong banks, a spokesperson for the Hong Kong Monetary Authority issued a statement on June 6, clarifying that mainland clients can still apply to open accounts normally. Overall, the account opening process is operating smoothly, and Hong Kong regulators maintain close and regular communication with their mainland counterparts.

Morgan Stanley noted that both HSBC and Standard Chartered have stated their operations fully comply with regulatory guidelines and expect the impact on their wealth management businesses to be limited.

J.P. Morgan estimates that business related to mainland visitors will contribute only about 2% to the revenue of HSBC and Standard Chartered in 2025. This includes wealth management fees and net interest income from deposit spreads from both existing and new mainland visitor banking clients. This implies a contribution to earnings per share in the mid-single-digit percentage range.

The firm believes that if negative sentiment leads to an excessive overreaction, it may create a buying opportunity.