ubs group released a research report indicating that the average daily trading volume of HKEX (00388.HK) is expected to remain strong in the near future for three reasons: first, investor divergence on any additional mainland policy stimulus may promote trading; second, recent adjustments may provide a more attractive entry point to the market; and third, foreign institutional funds still significantly underweight.

The bank pointed out that HKEX's average daily trading volumes in October and the fourth quarter to date reached 255 billion yuan and 238 billion yuan, respectively, representing a year-on-year increase of 1.2 times and 1 times. This year-on-year growth is driven by higher volatility and larger market capitalization. The bank estimates that this year's revenue, southbound average daily trading, and northbound average daily trading reached 131 billion yuan, 4.6 billion yuan, and 139 billion yuan RMB, respectively. This implies that the remaining average daily trading for the rest of the year will be 139 billion yuan, 43 billion yuan, and 123 billion yuan RMB.

Taking into account recent market activities and the latest interest rate reduction view, i.e., Trump's return to the White House is expected to lead to a more moderate future interest rate path for the Federal Reserve. The bank has raised its earnings per share forecast for HKEX for the years 2021 to 2026 by 1%, 3%, and 3%, reaching 10.36 yuan, 9.83 yuan, and 10.12 yuan respectively. The target price has been slightly raised from 344 yuan to 346 yuan, with a "Neutral" rating.