KGI released the fourth quarter global market outlook, believing that the previously proposed global strategy 'GUIDE' can still be used in the fourth quarter, namely gold, utilities industry, investment grade bonds, defensive individual stocks, and the Asia region. The bank also listed the six selected Hong Kong stocks for the fourth quarter, including Hong Kong Exchanges and Clearing (00388.HK), Ping An Insurance (02318.HK), China State Construction (03311.HK), Techtronic Ind (00669.HK), China Mobile (00941.HK), and BOC Aviation (02588.HK).

KGI also mentioned that the growth rate of mainland China's GDP slowed down in the second quarter, intensifying the economic growth pressure in the second half of the year. In the second half of the year, mainland China introduced policies more forcefully to achieve the economic growth target. The bank pointed out that whether Hong Kong stocks can maintain their high levels within the year's strong background is difficult solely based on economic fundamentals. The observation period for policy effects typically requires at least six months, and the earnings performance of mainland China and Hong Kong stocks in the third and fourth quarters may be affected by the slowdown in the mainland economy.

As of the end of September, the Hang Seng Index's blended 12-month PE ratio was 9.6 times, just breaking through the negative one standard deviation of the past ten years. The next resistance level is at 10.6 times, which is the early 2023 high. According to market forecasts for constituent stocks in the Hang Seng Index, the blended 12-month earnings are 2,200 yuan, corresponding to 23,210 points for the Hang Seng Index. If the investment sentiment in the overall market does not weaken and the implementation of national policies exceeds expectations, the Hang Seng Index valuation is expected to reach 11.5 times the PE ratio of the past five years, corresponding to an index of 25,300 points.