KGI Asia: Hang Seng Index's target price for the next 6 months raised to 20,900 points
KGI Asia released the global market outlook for the second half of 2024, expecting the Hang Seng Index to be raised to 20,900 points in the next 6 months. The forecasted P/E ratio is 10.22 times, still lower than the average P/E ratio of the past decade, indicating strong upward momentum in the market. It is predicted that inflation data in the second quarter of this year will trend downwards again, and the labor market will continue to slow down. Market expectations suggest that interest rate cuts may begin in the fourth quarter of this year, with a possibility of 1 to 2 rate cuts throughout the year. Capital markets are expected to experience fluctuations in the second half of the year, with a slightly more favorable trend towards the end of the year. KGI Asia recommends paying attention to five major themes and 11 focus stocks
According to the information from WiseFinance APP, KGI Asia has released the global market outlook for the second half of 2024. Based on the Hang Seng Index starting at 14,794 points this year, the basic expectation is for the Hang Seng Index to target 20,900 points in the next 6 months, slightly higher than the target of 19,260 points set by the bank at the end of last year. The corresponding forecasted P/E ratio is 10.22 times, still lower than the average P/E ratio of the Hang Seng Index over the past decade, indicating that there is still momentum for the market to rise.
On the external front, KGI Asia expects inflation data to decline again in the second quarter of this year, and the labor market will continue to slow down. Market expectations suggest that interest rate cuts may begin in the fourth quarter of this year, with a possibility of 1 to 2 rate cuts throughout the year.
The focus of observing the U.S. economy in the second half of the year will be on the presidential election. It is important to pay attention to changes in U.S.-China relations and whether other countries will follow the pace of the United States. Given various geopolitical variables, capital markets are inevitably subject to fluctuations in the second half of the year. The bearish factor remains that "China issues continue to be a key agenda in the U.S. election platform."
KGI Asia believes that the tug-of-war situation in the second half of the year will slightly shift towards favorable factors. This includes the combination of real estate policies accelerating the bottoming out of the mainland property market, state-owned enterprises actively distributing dividends, mainland and overseas funds flowing into Hong Kong stocks with relatively low valuations.
KGI Asia recommends focusing on five major themes for Hong Kong stocks, including economic recovery benefiting operations, relaxation of real estate policies, reform of state-owned enterprises increasing returns, continuous growth in electricity demand, and actively expanding business overseas.
In addition, KGI Asia has listed 11 focus stocks with positive outlooks for the second half of the year and their target prices, including Tencent (00700) (HKD 450), Hong Kong Exchanges and Clearing (00388) (HKD 303), Ping An Insurance (02318) (HKD 42), Haier Smart Home (06690) (HKD 32), China Unicom (00762) (HKD 7.3), China Construction Bank (00939) (HKD 6.3), China Resources Power (00836) (HKD 25), Dongfang Electric (01072) (HKD 14.6), Anta Sports (02020) (HKD 94), Ctrip (09961) (HKD 460), and Pop Mart (09992) (HKD 45)