China stocks veteran Hao Hong sees Hong Kong surge to 2021 highs
HONG Kong’s benchmark equity index may jump to the highest level since early 2021, after investors are back in force following the Lunar New Year holidays, according to long-time market veteran Hao Hong.
“The Hang Seng Index is at an important technical point,” said Hong, chief economist at Grow Investment Group, who’s known for a number of accurate predictions on turns in Chinese financial markets. “It’s highly likely to break up its 850-week moving average – and when that happens decisively, the market will be very bullish.”
Asked how high the benchmark may reach in this cycle, he said “30,000 points”. That would represent a 32 per cent increase from the Hang Seng’s close on Friday (Jan 27), and would mark the first time to hit such a level since February 2021.
Hong cited stronger-than-expected holiday spending data as a catalyst for potential positive sentiment among investors.
China saw a total of 308 million domestic tourism trips during the week-long holidays, an increase of over 23 per cent from the same period of last year, according to the Ministry of Culture and Tourism.
Traders may find themselves more excited as they return to markets next week, after data showed sales of travel agencies and related service industries rose 1.3 times year on year, recovering to more than 80 per cent of 2019 levels.
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Hong Kong equities have risen 26 per cent since Nov 18, when Hong turned bullish ahead of China’s abrupt end to its years-long Covid-Zero policy. At the time, he forecast the Hang Seng would jump to 23,000 in 2023.
Hong is known for a track record that includes having called the stock boom and bust of 2015. Prior to opening Grow’s first office in Hong Kong, he left Bocom International as chief strategist in May.
Hong isn’t rushing to raise his targets for either Hong Kong or Chinese shares traded on the mainland, however.
“Those good holiday numbers will help sentiment. But they could hardly prove that fundamentals are back to normal,” he said, adding that 3,500 remains his forecast for the Shanghai Composite Index this year. It closed at 3,264.8 on Jan 20. BLOOMBERG
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