Stock Markets
Morgan Stanley maintains Equalweight rating on Futu Holdings after bank stake buy
On Tuesday, Morgan Stanley maintained its Equalweight rating on shares of Futu Holdings Limited (NASDAQ:), with a steady price target of $70.00. The firm’s stance comes after the recent announcement made by Futu on Sunday, disclosing the acquisition of a 44.1% interest in Airstar Bank for HK$440 million, positioning Futu as the second-largest shareholder of the virtual bank, following Xiaomi (OTC:) Group.
The investment aligns with Futu’s strategic vision of enhancing its wealth management offerings to increase client engagement. It is anticipated to create additional cross-selling opportunities between Airstar Bank and Futu’s brokerage operations, improve the utilization of Futu’s extensive client base, and streamline client asset transfers over time.
Despite the valuation of the deal being at a premium, with Airstar Bank estimated at HK$997 million compared to its FY23 equity of HK$557 million, the impact on Futu’s profit and loss statement is expected to be minimal in the near term. This is attributed to Airstar Bank’s relatively modest asset size of HK$2.3 billion and a net loss of approximately HK$200 million for FY23.
Looking ahead, Morgan Stanley suggests that other initiatives from Futu, such as the anticipated launch of cryptocurrency trading services in the coming months, are likely to be more significant drivers for the company’s performance in the near future. These developments are keenly awaited as potential catalysts for Futu’s growth trajectory.
In other recent news, Futu Holdings Limited has been experiencing robust growth in its client base. Analysts from Morgan Stanley and BofA Securities have upgraded their price targets for the company’s shares due to this impressive client growth. The company’s first quarter of 2024 was marked by strong performance, with approximately 177,000 new paying clients added.
Futu Holdings has also seen a significant increase in its revenue, with a 9.2% quarter-over-quarter growth reported for the first quarter of 2024. Despite a slight year-over-year decline in net profit, the company exceeded BofA Securities’ expectations by 3%.
The company’s expansion into new markets, particularly Japan and Malaysia, has contributed to its client acquisition momentum. Futu Holdings has raised its full-year guidance for new paying clients to 400,000, reflecting the company’s optimism about its growth trajectory.
In addition to client growth, Futu Holdings has reported a 24% year-over-year increase in paying clients and a rebound in trading volumes and client assets. However, it’s worth noting that the company has expressed a conservative stance regarding profitability in the Japanese and Malaysian markets. These are some of the recent developments in Futu Holdings Limited.
InvestingPro Insights
Following Morgan Stanley’s assessment of Futu Holdings Limited (NASDAQ:FUTU), InvestingPro data and tips offer additional perspectives on the company’s financial health and market performance. With a robust market capitalization of $10.2 billion and a Price/Earnings (P/E) Ratio of 19.26, Futu demonstrates a balance between its market value and earnings potential.
The company’s revenue growth over the last twelve months stands at a solid 11.37%, highlighting its ability to expand its financial base in a competitive sector. Moreover, the impressive Gross Profit Margin of 93.09% for the same period indicates Futu’s efficiency in managing its cost of goods sold and maintaining profitability.
An InvestingPro Tip that aligns with the article’s narrative is the strong return over the last three months, with a 25.95% increase in price total return, reflecting investor confidence and market momentum. Additionally, the company’s lack of dividend payments suggests a reinvestment strategy aimed at fueling further growth, which may appeal to growth-oriented investors.
For readers seeking a deeper dive into Futu’s investment potential, InvestingPro offers additional tips, including the company’s high return over the last decade and strong return over the last five years. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With several more InvestingPro Tips available, investors can gain a comprehensive understanding of Futu’s market position and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
(Reuters) -Private equity firm Insight Partners is on the brink of closing a new $10 billion-plus fund, roughly half the amount originally targeted, the Financial Times reported on Sunday, citing five people with knowledge of its plans.
Insight will not formally close its 13th fund until early next year, the report said, adding that the final figure may be closer to $12 billion.
Insight Partners declined to comment on the report.
The report said Insight is using a private equity-style structure to sell more than $1 billion worth of stakes in start-ups and to free up cash to return to investors.
One of the start-ups is Israeli cybersecurity firm Wiz, which had called off a $23 billion deal with Google parent Alphabet (NASDAQ:) in July, the report said.
New York-based Insight raised $20 billion for its 12th flagship fund in 2022, aiming to ramp up investments in software and technology companies.
JERUSALEM (Reuters) -Prime Minister Benjamin Netanyahu said Israel would inflict a “heavy price” on the Iran-aligned Houthis who control northern Yemen, after they reached central Israel with a missile on Sunday for the first time.
Houthi military spokesman Yahya Sarea said the group struck with a new hypersonic ballistic missile that travelled 2,040 km (1270 miles) in just 11 1/2 minutes.
After initially saying the missile had fallen in an open area, Israel’s military later said it had probably fragmented in the air, and that pieces of interceptors had landed in fields and near a railway station. Nobody was reported hurt.
Air raid sirens had sounded in Tel Aviv and across central Israel moments before the impact at around 6:35 a.m. local time (0335 GMT), sending residents running for shelter. Loud booms were heard.
Reuters saw smoke billowing in an open field in central Israel.
At a weekly cabinet meeting, Netanyahu said the Houthis should have known that Israel would exact a “heavy price” for attacks on Israel.
“Whoever needs a reminder of that is invited to visit the Hodeida port,” Netanyahu said, referring to an Israeli retaliatory air strike against Yemen in July for a Houthi drone that hit Tel Aviv.
The Houthis have fired missiles and drones at Israel repeatedly in what they say is solidarity with the Palestinians, since the Gaza war began with a Hamas attack on Israel in October.
The drone that hit Tel Aviv for the first time in July killed a man and wounded four people. Israeli air strikes in response on Houthi military targets near the port of Hodeidah killed six and wounded 80.
Previously, Houthi missiles have not penetrated deep into Israeli air space, with the only one reported to have hit Israeli territory falling in an open area near the Red Sea port of Eilat in March.
Israel should expect more strikes in the future “as we approach the first anniversary of the Oct. 7 operation, including responding to its aggression on the city of Hodeidah,” Sarea said.
The deputy head of the Houthi’s media office, Nasruddin Amer, said in a post on X on Sunday that the missile had reached Israel after “20 missiles failed to intercept” it, describing it as the “beginning”.
The Israeli military also said that 40 projectiles were fired towards Israel from Lebanon on Sunday and were either intercepted or landed in open areas.
“No injuries were reported,” the military said.
PARIS (Reuters) – Eight people have died trying to cross the Channel from France to England, French authorities said on Sunday, confirming earlier media reports.
This latest incident follows the deaths of 12 people earlier this month when their boat capsized in the Channel on its way to Britain and highlights the pressure on the British and French governments to find ways to tackle the boat crossings.
Jacques Billant, the Prefect of the Pas-de-Calais region, said that rescue crews were alerted that a boat with 59 people onboard was in difficulty in waters off the coast of Ambleteuse in the Pas-de-Calais area.
“A new drama took place around one in the morning and we deplore the death of eight people,” he told a news conference, adding that the other 51 onboard were now in the care of rescue and medical crews.
The dead were men from Eritrea, Sudan, Syria, Egypt, Iran and Afghanistan, he added.
The Channel is one of the world’s busiest shipping lanes and currents are strong, which makes crossing on small boats dangerous.
The latest incident brings to 46 the number of people who have died trying to cross the Channel from France since the start of the year, Billant said.
On September 14 alone there were eight attempts to cross the Channel from France and some 200 migrants were rescued, he said.
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