UBS lowers HK stock gauge target

Hong Kong

UBS Group has lowered its target for Hong Kong's benchmark stock gauge by 25 per cent, saying its worst-case scenario for the city is coming true as the economy weakens and tourism arrivals decline.

The Hang Seng Index will slide to 19,775 as slowing growth in the city and China weigh on corporate earnings, UBS analyst Spencer Leung wrote in a report dated Sept 2. That's a 5.5 per cent drop from the last close and implies a 16 per cent decline for 2015. In December, UBS's target for the end of 2015 was 26,484 and the 19,775 level was the "black sky" of four possible outcomes.