Only way is up for HSI, say analysts
Hot money and relative cheapness of city's market is good news as index is tipped to climb to 25,000 points in the first quarter next year
Analysts predict the Hang Seng Index will rise further in the next few months, after it hit a 16-month high.
The benchmark rose 128.64 points to 22,623.37 yesterday, up 22.7 per cent year to date.
An influx of hot money, mostly from the United States and some from Europe, has recently been driving up the index, said Francis Kwok Sze-chi, executive director of Bright Smart Securities and Commodities.
"The market has too much hot money now," Kwok said, adding that the index will rise to 23,000 points at the end of this year and 25,000 at the end of March.
The benchmark has further room to rise, Kwok said, because its price-earnings ratio of 10.6 times is relatively cheap.
"The market can't go down," he said. "There is no bad news."