Citigroup: Upgrades HKEX (00388) rating to "buy" and raises target price to 370 Hong Kong dollars.

Citi has released a research report stating that it has upgraded its rating on HKEX (00388) from "sell" to "buy", with a target price raised from HK$275 to HK$370. The bank's profit forecast for HKEX for fiscal year 2024 remains basically unchanged, while earnings per share forecast for fiscal years 2025 to 2027 have been lowered by 1% to 2% to reflect increased tax expenses, some of which have been offset by expectations of higher average daily trading volume. Citi pointed out that the development of artificial intelligence has sparked investors' enthusiasm for technology stocks, driving a surge in trading volume in the Hong Kong stock market. As of today, the average daily trading volume of Hong Kong stocks has reached HK$194 billion, far exceeding the market's general expectation of HK$145 billion for 2025 and last year's HK$132 billion. As a major beneficiary of the market sentiment improvement, Citi believes that the recent AI boom can continue to support trading in Hong Kong stocks, and the revival of IPO activities will also benefit HKEX. In addition, the expectation of the United States maintaining higher interest rates for a longer period is expected to be favorable for investment income.