Damo: Maintaining the “basic” situation of the Hang Seng Index until June 2026, the target is 24,500 points

The Zhitong Finance App learned that Morgan Stanley released a research report saying that the covered market is now close to its target for a “bull market” scenario in June 2026, almost entirely due to the expansion of valuation multiples. Unless global growth accelerates significantly from now on, the bank doubts whether this trend is sustainable.

The bank said that if analyzed using a “top-down” approach, it believes that if Asian and emerging market stock valuations accelerate again without profit, it is likely that it will be difficult to continue. It believes that India's growth is expected to pick up; if the US dollar exchange rate weakens further, the Bank of Japan still has room to raise interest rates, while the Federal Reserve will cut interest rates drastically.

At the market level, after increasing holdings in China and South Korea this year, the current position risk is lower than in previous years, and “increased” holdings in Japan, Singapore, India, the United Arab Emirates, and Brazil, while “reducing” holdings in regional markets such as Indonesia and Saudi Arabia. In terms of industry strategy, preferences continue to include finance, domestic e-commerce and consumption, industry, maintaining “low” energy and raw materials (excluding gold), while the IT sector adopts selected strategies.

Damo maintained the Hang Seng Index's “basic” target of 24,500 points until June 2026, which is equivalent to the predicted price-earnings ratio of 10.6 times; in the “bull market” scenario, the Hang Seng Index targets 28,000 points in June 2026, which is equivalent to the predicted price-earnings ratio of 11.5 times; in the “bear market” scenario, the Hang Seng Index targets 18,300 points until June 2026, which is equivalent to 8.2 times the predicted price-earnings ratio.