Assessing the Sustainability of Hong Kong’s Stock Market Rally: DBS Urges Investor Caution Amid Unprecedented Beijing Policies

DBS advises Hong Kong investors to tread carefully regarding the longevity of the stock market surge. The impact of China's financial regulations and company profits should be evaluated before estimating the durability of the surge, says the Singapore-based bank.

The bank had internally predicted a target of 20,300 for the Hang Seng Index by the end of 2024. This goal was established prior to unexpected policy declarations from Beijing last month, which elevated the standard to a 32-month peak of 23,099.78 on Monday.

Michelle Ho, the leading strategist for investment at the primary investment office in North Asia, stated in a Hong Kong briefing on Tuesday that the target might exceed to 22,800, however, this is just a theoretical excess. She added that fundamentally, they are anticipating further fiscal strategies to be unveiled and to observe how these would impact corporate profits.

"The policy initiatives introduced by Beijing are unique and serve to uplift morale," added Ho.