DBS has released a Hong Kong stock market outlook report, and investors are hotly discussing the impact of the domestic housing market on the Chinese stock market. The bank admits that the real estate market has a significant impact on China's GDP and financial system stability, but it also believes that as China's structural rebalancing advances, the impact of the real estate industry on China's economy is weakening. The bank believes that potential interest rate cuts and continued southbound fund inflows will benefit the Hong Kong stock market in the second half of 2024.

The bank reiterates its optimistic view of the Hong Kong stock market, with a basic scenario target prediction of 20,300 points for the Hang Seng Index over the next 12 months (until June 2025), an estimated 6.4% increase in earnings per share, and an estimated P/E ratio of 9.7 times in 2024. The bank predicts that the Chinese economy is recovering and structurally rebalancing, and expects more supportive policies and improved liquidity environment from the authorities.

DBS points out the investment themes for the second half of the year. The first is to actively seek opportunities to collect quality stocks in industries such as science and technology hardware, especially those that can gain market share and increase shareholder value. The second is to continue to hold high-yielding state-owned enterprise stocks.

The bank has listed its preferred Hong Kong stock names, with Ping An Insurance (02318.HK) replacing KE Holdings (02423.HK). Its preferred stocks include AAC Technologies (02018.HK), Anta Sports (02020.HK), China Mobile (00941.HK), Sinopec (00386.HK), China Resources Beer (00291.HK), Ping An Insurance, Samsonite (01910.HK), Tencent (00700.HK), Ctrip (09961.HK), and Xiaomi-W (01810.HK).