HSI to hit 20,500 by year-end, says Citi

Jamie Zhang

Citigroup has raised its forecast for the Hang Seng Index to 20,500 points by the end of 2024 on expected policy support and stronger consumption.

The investment bank also predicts the HSI will rise to 22,000 by the first half of 2025.

China equity strategist Pierre Lau said the upcoming third plenary session of the central committee this month is expected to usher in structural reforms, new initiatives for cross-border trade as well as reforms of state-owned enterprises.

The optimistic outlook amid news that as China is accelerating the construction of large wind power and photovoltaic plants to boost electricity supply, with consumption hitting a record high of 6,539 kWh per capita in 2023.

Citigroup maintained its estimate of China's economic growth at 5 percent this year.

Citigroup showed a preference for stocks benefitting from export growth and higher commodity prices. Its top picks are discount e-commerce giant PDD and semiconductor hardware and software provider ASMPT (0522).

Meanwhile, UBS expects the MSCI China Index to achieve high single-digit growth in the second half of the year, benefitting mainly from a recovery in consumption, exports and investment.