FSMOne: The Fed's current interest rate cut cycle has ended, and the Hang Seng Index's target price for next year is around 27,000 points.

FSMOne (Hong Kong) General Manager Chan Ka Long pointed out at a press conference that based on a target price-earnings ratio of 11 times, the Hang Seng Index is expected to reach close to 25000 points by the end of this year, 27000 points in 2027, and 29000 points in 2028. Using a target price-earnings ratio of 12, the target prices for the MSCI China Index in 2027 and 2028 are 79.2 and 96 respectively. FSMOne (Hong Kong) portfolio management and research analyst Li Xu stated that with the inclusion of quality stocks such as high-growth AI model companies MiniMax (00100) and KNOWLEDGE ATLAS (02513) in the index, the index is expected to regain momentum. Additionally, optimism towards the hot Hong Kong IPO market, continued inflow of funds from northbound trading, and bullish sentiments on AI hardware could lead to the target price of 29000 points in 2028. Chan Ka Long also believes that the enthusiasm for AI hardware will continue, with strong semiconductor and memory manufacturers leading the stock market. In terms of the Hong Kong stock market, the commercialization of AI models and other supporting factors could lead to a potential revaluation of tech company valuations. Furthermore, with a clearer regulatory outlook on the price war in the food delivery industry, the performance of major internet platforms is expected to improve, supporting the profit recovery in the technology sector. Regarding the United States, he believes that the current rate cut cycle has ended. Given the significant impact of volatile energy prices on inflation, investors should also pay attention to the gradually rising housing CPI. The new Fed Chair Powell's dovish stance may lead to increasing conflicts among Fed officials. Chan Ka Long predicts that inflation pressure will keep long-term bond yields high, while short-term bond yields may rise due to unexpected rate hikes. The yield curve has largely normalized, and investors may consider short-term bonds as a priority. It is also advisable to increase exposure to 5 to 10-year US Treasury bonds and remain optimistic about investment-grade corporate bonds.