The bank previously set the Hang Seng Index target price at 21,000 points, which has now been adjusted.
According to the Securities Times APP, although the market expects the Fed to start an interest rate cut cycle next week, the investment community believes that the related factors may not necessarily stimulate the overall trend of the Hong Kong stock market. Zhang Haon, Investment Director of China Citic Bank (International) Personal and Business Banking, expects that the Fed's interest rate cut will only proceed in an orderly manner. It may not cut by more than 1% this year, and in the past month, the change in the interest rate cut expectation has not had a significant direct impact on the Hong Kong stock market. Reflecting that the Hang Seng Index trend is no longer influenced by external fundamentals, the target price for Hong Kong stocks this year is set at 19,800 points, equivalent to a price-earnings ratio (PE) of about 9.5 times. The bank had previously set the Hang Seng Index target price at 21,000 points, which has now been adjusted.
He bluntly stated that among the approximately 600 constituent stocks of MSCI, 100 belong to high-yield stocks, and the total return of the first 8 months of the high-yield stock index reached 14%, indicating that the market currently "focuses on stocks rather than the market." It is believed that the high-yield stock theme will continue to be bullish, and some recently adjusted China H-Shares index sectors have greater opportunities for bottom fishing.
Taking a comprehensive view of the current outperforming Hang Seng Index and more than 4% dividend yield of 20 constituent stocks, they are concentrated in the energy, financial, and comprehensive enterprise sectors. Energy stocks and China mainland banking stocks have recently experienced adjustments due to different negative news, but after the significant rise in stock prices, the subsequent pullback is more favorable for future trends, and the current level has a more attractive rate of return.
Zhang Haon added that the biggest current uncertainty in the market is still the U.S. presidential election, as the investment community has uncertainties about the policies of the successor. If the policies of the new president do not address inflation smoothly, it may not necessarily decline.