Staff reporter
Hang Seng Index could jump over 26 percent to 22,621 points in 12 months, the Hang Seng Indexes Company estimated, based on the targets of blue chip stocks.
It comes as the key benchmark for Hong Kong stocks has been struggling between 14,900 and 19,700 points this year amid geopolitical tensions and the weaker-than-expected economic recovery.
If the target of 22,621 points can be reached, the HSI will hit a new high after January 2023.
Hang Seng Indexes, which manages a series of market indexes tracking Hong Kong-listed stocks, estimated the market by aggregating the target prices of 82 index constituents.
The company called it a "bottom-up" perspective, different from the usually used "top-bottom" perspectives involving predicted forward multiple such as the price-to-earnings ratio of the overall market.
From the new angle, the HSI is expected to climb to 22,621 points, 26 percent higher than the close of 17,989 points as of August 30. That is 28 percent higher than yesterday's close of 17,651 points.
Based on the August 30 data, the Hang Seng China Enterprises Index could also grow 26 percent to 7,962 points and the Hang Seng Tech Index by 34 percent to 4,767 points in 12 months. These are compared with 6,023 points and 3,496 closed respectively yesterday.
But Hang Seng Indexes also reminded investors that the estimated targets for indexes from the new perspective would tend to be more optimistic, as the outlook for individual stocks tends to be more positive for various reasons.
Yesterday, the HSI dipped 40 points, or 0.2 percent, to 17,651 points, with the main board's turnover shrinking to only HK$79.3 billion. The HSCEI edged down 8 points while the tech gauge rose 10 points.
Meanwhile, Hong Kong Exchanges and Clearing (0388) will launch a series of weekly equity options on November 4, involving 10 heavyweight companies traded in the city.
They include HSBC (0005), HKEX, Tencent (0700), Kuaishou (1024), BYD (1211), Ping An Insurance (2318), Meituan (3690), JD.com (9618), Baidu (9888) and Alibaba (9988).
However, UBS Wealth Management APAC's Chief Investment Office yesterday downgraded the Chinese market from "optimistic" to "neutral", citing the rising geopolitical risks and the country's weak economy.
It comes after UBS's China strategist James Wang Zonghao forecast a 10 percent growth for MSCI China Index in three to six months, mainly benefiting from the increases in earnings.
