HSBC lowers Hang Seng Index year-end target, next year expected to reach 21860 points.

HSBC Global Research published a quarterly report, maintaining a "neutral" rating on the Hong Kong stock market, but lowering the year-end target for the Hang Seng Index from 19,810 points to 19,060 points, a decrease of 750 points or 3.8%. The Hang Seng Index target for the end of next year is 21,860 points, with a forecasted P/E ratio of approximately 9.8 times and an expected earnings per share growth of 10%. In addition, the year-end target for the State-owned Enterprises Index was lowered from 7,200 points to 6,840 points, a decrease of 360 points or 5%, with a target of 7,860 points for the end of next year. HSBC reiterated its "overweight" rating for the Mainland Chinese market, while lowering the year-end target for the FTSE China Index from 22,550 points to 20,780 points, with a target of 23,510 points for the end of next year. The index is currently at 19,740 points. HSBC pointed out that the Federal Reserve will continue to cut interest rates in the future, which will help normalize the Hong Kong real estate market. This will provide opportunities for banks to improve their loan asset quality. Real estate has always been one of the most important pillars of the Hong Kong economy, but the high interest rate environment has increased borrowing costs. With the expected continued rate cuts by the Federal Reserve, the real estate sector has outperformed the broader market since July, and more positive factors are expected in the coming months. However, rate cuts have both positive and negative effects on bank stocks, impacting profits but also increasing loan demand. In addition, ASEAN countries benefit from the decline in US yields, so HSBC has raised its rating for Indonesia to "overweight," while Malaysia and the Philippines remain "neutral." Due to factors such as the strong Japanese yen and competition in artificial intelligence, caution is advised in the North Asian markets.