According to Futu Securities, DBS recently released its outlook for the stock markets in mainland China and Hong Kong for the second half of the year. DBS believes that with improved liquidity, Chinese stocks can rebound during the period of consolidation in the property market, and has set a 12-month target price of 20300 points for the Hang Seng Index. DBS suggests looking for investment opportunities in the internet and technology hardware industries, especially in stocks that can gain market share and increase shareholder value, followed by continuing to hold stakes in state-owned enterprises with high dividend yields, as they have defensive characteristics and have the potential to attract inflows of Southbound funds.

DBS believes that the potential rate cuts and continued inflow of Southbound funds will be favourable factors for the Hong Kong stock market in the second half of 2024. DBS reiterates its positive outlook for the future of the Hong Kong stock market, with a basic scenario target of 20300 points in the next 12 months (until June 2025), predicting an earnings per share growth of 6.4%, a PE ratio of 9.7 times for 2024, and anticipating a stabilizing Chinese economy and structural rebalancing, with authorities expected to roll out more supportive policies and improvements in liquidity environment.

DBS suggests that the investment themes for the second half of the year are, firstly, actively seeking opportunities to collect quality stocks in industries such as technology and hardware, especially in those stocks that can gain market share and increase shareholder value, and secondly, continuing to hold high-yielding state-owned enterprise stocks.

DBS has listed its preferred Hong Kong stocks, with Ping An Insurance (02318) replacing Ke Holdings (02423). Its preferred stocks include AAC Technologies (02018), ANTA Sports (02020), China Mobile (00941), Sinopec (00386), China Resources Beer (00291), Ping An Insurance, Samsonite International (01910), Tencent Holdings (00700), and Ctrip.com (09961).