HONG KONG (XFN-ASIA) - Credit Suisse said it has cut its year-end target for
Hong Kong's main Hang Seng index to 26,100 from 28,000, and the target for the
Hang Seng China Enterprises index to 14,600 from 15,300.
Investors perceive higher risk premium given the global financial situation
in the past two months, it said.
But it noted that the Hong Kong market is not trading at expensive levels,
compared to its historical valuations and relative to the region.
It has an "overweight" stance on the local bourse.
"Should investors continue to worry about a worsening macro outlook,
potential upside to the HSI and HSCEI would be reduced by 10 pct to year-end
target of 23,300 and 12,900 respectively," it said.
Credit Suisse recommended "overweight" on stocks geared towards Hong Kong's
domestic economy and the property market, and "neutral" on local financial
stocks for the next 6-9 months.
It is "underweight" on China stocks due to mainland market fluctuations and
regulatory uncertainty.
roby.lau@xfn.com
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