Morgan Stanley: The Hang Seng Index is expected to reach 19,400 points by the end of next year, almost "standing still" from the current price.

Morgan Stanley released a 2025 stock market outlook report with the theme "Bumpy Ride", expecting the Hang Seng Index to reach 19400 points by the end of next year under normal circumstances, almost "standing still" from the current price. The most optimistic prediction is 25000 points, and the most bearish prediction is 14000 points, representing an increase of about 28% and a decrease of 28% respectively from the current level. Morgan Stanley has a "hold" rating for telecommunications and utilities stocks, a "reduce" rating for consumer and real estate stocks, and has upgraded the rating for bank stocks to "in line with the broader market." Finally, the report suggests buying A-shares instead of offshore markets; investing in high-profit stocks and avoiding stocks facing tariff or supply chain risks. Jonathan F. Garner, Chief Asian Equity Strategist at Morgan Stanley, and his team issued a report forecasting that the state-owned enterprise index will reach 6970 points by the end of next year under normal circumstances, with optimistic and bearish predictions of 9000 and 5000 points respectively. As for the MSCI China index, it is expected to reach 63 points by the end of next year under normal circumstances, with optimistic and bearish predictions of 81 and 45 points respectively. In addition, the Shanghai and Shenzhen 300 Index is expected to reach 4200 points by the end of next year; with optimistic and bearish predictions of 5000 and 3130 points respectively. In October, Morgan Stanley raised its forecast, predicting the Hang Seng Index to reach 21550 points by June next year under normal circumstances, with optimistic and bearish predictions raised to 26300 and 13900 points respectively. Morgan Stanley believes that the mainland stock market will be more volatile next year due to a deflationary environment and escalating geopolitical tensions including tariffs. Profit growth pressure and rising equity risk premiums indicate that there is no room for further growth. Compared to offshore markets, A-shares are preferred.