The Hang Seng Index should breach the 25,000-point level by the end of next year, according to Kim Eng Securities head of research Stephen Brown. The projection is extremely optimistic given the weak sentiment on the Hong Kong market and is 36.59 per cent above the record index high of 18,301.69 reached on March 28, 2000. 'I expect the index to be well over 25,000 by the end of 2003. We are entering a period of sustained and tremendous equity market force over the next few years,' said Mr Brown at a presentation to the Hong Kong Management Association. Low interest rates, low inflation and the liberalisation of the service sectors in China following its accession to the World Trade Organisation would enable the index to reach the new high, Mr Brown said. 'The key point of WTO for Hong Kong is that we can get access to the service sector in China, which is where we will create tremendous value,' he said. The Hang Seng Index closed at 11,000.25 points yesterday and Mr Brown does not expect it to rise a lot in the next six months. 'I am not trying to say [the index] is going through the roof in the next six months. On a 12 to 18-month view, I am very optimistic about the index but I think it has still got some trading around to do,' Mr Brown said. Such long-term bullish projections are brave, particularly after the 1996 forecast by Morgan Stanley's then Hong Kong strategist Peter Churchouse that the Hang Seng Index would reach 28,000 points in 1999. The Asian crisis, which hit in July 1997, scuppered that forecast and caused the index to trough at 6,660.42 in August 1998. On the last trading day of 1999 the market did achieve a then record high of 16,962.1, but was still far below Mr Churchouse's forecast. Mr Brown was optimistic about the long-term outlook for Hong Kong's high value-added economy and claimed some officials were focusing too much on costs. 'If you want to have Bangladesh costs, which seem to be an obsession of certain people in the Government, you're going to end up with a Bangladesh economy,' Mr Brown said.