HSBC Analysts Predict 21% Growth for Hong Kong-Listed Chinese Stocks
HSBC sees a bright future for Hong Kong-listed Chinese stocks, expecting a 21% rise by 2025 amid improving economic conditions in China
HSBC, Chinese Stocks, Hong Kong, Economy, Investors
Hong Kong: HSBC is feeling optimistic about Chinese stocks listed in Hong Kong. They believe these stocks will benefit from a friendlier policy environment in mainland China and a brighter economic outlook.
The Hang Seng China Enterprises Index could jump by 21% in 2025, according to HSBC strategists. They’ve upped their year-end estimate for the index to 8,800, which is a nice bump from their earlier prediction.
Interestingly, they’ve also changed their stance on Hong Kong stocks, moving from neutral to overweight. Meanwhile, they’ve downgraded India to neutral, which shows a shift in focus.
Despite a rough start to the year for Chinese stocks, mainly due to rising geopolitical tensions, HSBC thinks lower interest rates and efforts to boost tourism and the struggling property market will help Hong Kong’s stock scene.
They noted that the outlook for mainland China’s economy is looking better, and the government seems committed to stabilizing things. This is good news for the A-share market, and they believe Hong Kong will benefit as well.
However, there are still worries about how strong the economic recovery will be. Some experts are even sounding alarms about a potential deflationary spiral, similar to what Japan faced in the ’90s.
Investors are now keeping an eye on the upcoming National People’s Congress meeting in March. They’re hoping to hear about Beijing’s growth targets and plans to boost consumption.
Last year, HSBC had predicted a 24% gain for the HSCEI gauge in 2024, and it ended up with a 26% increase. So, they seem to have a good track record.
HSBC’s positive outlook is a bit different from some other firms like Goldman Sachs, which downgraded Hong Kong stocks due to weak property and retail sectors. Morgan Stanley is also cautious about Chinese shares because of deflation and geopolitical issues.
On another note, HSBC has also lowered its recommendation for India, citing a slowdown and high valuations that might limit returns this year. The Nifty 50 Index has been losing momentum lately, and the Indian government has cut its growth forecast.
In contrast, HSBC upgraded South Korean stocks to neutral, seeing the recent selloff as a good chance to invest more. They believe the political changes there won’t significantly affect earnings.
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