Goldman Sachs Upgrades HKEx to BUY.

Goldman Sachs Upgrades HKEx To Buy; Targets HK$130

2007-6-27 10:17:00 a.m. HKT, DJN

STOCK CALL: Goldman Sachs ups HKEx (0388.HK) to Buy from Neutral, target to HK$130 (29X 2008 EPS) from HK$90 (28X 2007 EPS). "We see HKEx as a robust turnover story" driven by

1. China's strong macro/corporate growth (60% of turnover from China stocks),
2. faster CNY rise;
3. also notes QDII expansion,
4. HKEx's planned reform steps on things like short selling, position limits.
5. Potential arbitrage/cross-trading mechanism between HKEx, Shanghai Stock Exchange positive too.

Stock down 0.5% at HK$106.