===== BANK OF E ASIA: Expects the Hang Seng Index to reach 22,500 points in the first half of next year, with Hong Kong property prices rising 5% for the whole year. =====

According to the Zhitong Finance APP, recently, Bank of East Asia (00023) released its economic market outlook, predicting that the target level for the Hang Seng Index in the first half of next year will be 22,500 points, equivalent to a price-to-earnings ratio of 10 times. It is expected that the ongoing interest rate cuts by the Federal Reserve will provide some support for Hong Kong stocks. Regarding Hong Kong's property prices and GDP, the bank expects a rebound of 5% and a growth of 2.5% respectively next year. Property prices are expected to be driven by falling interest rates, the government's easing of demand management measures, and effective talent acquisition policies.

The bank also believes that the Federal Reserve's monetary policy stance is shifting towards neutrality, predicting a 0.25% rate cut this month, followed by a 0.25% cut each quarter next year, totaling a 1% reduction for the entire year, bringing the benchmark interest rate back to 3.25% to 3.5%. Hong Kong banks are expected to follow the U.S. rate cuts this month and early next year, with the prime rate (P) adjusted down to 5.25%. Additionally, the target level for the S&P 500 Index in the first half of next year is projected to be between 6,100 and 6,200 points, with a price-to-earnings ratio hovering around 22 to 23 times, similar to the average data from the past 2 to 3 years.

Furthermore, the bank recommends focusing on local high-yield enterprises, such as Hong Kong banks, utilities, telecommunications, and real estate; value and high-yield state-owned enterprises in mainland China, such as mainland telecommunications, banks, insurance, electricity, and natural gas; and industries benefiting from consumption policies in mainland China, such as the internet, food and beverage, home appliances, and automobiles, totaling three major sectors