Market sell-off overdone says DBS, expects Hang Seng Index to hit record high in 12 months’ time

The Singapore-based lender predicts the Hang Seng Index could reach the 33,400 level by next March

The bank’s bullish view takes into consideration prospects of a post-Covid-19 economic recovery as well as continued southbound fund inflows into Hong Kong

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The Singapore lender DBS says the recent decline in Hong Kong stocks is likely to be a short-term blip. Photo: Getty Images

Published: 8:30am, 26 Mar 2021Updated: 8:30am, 26 Mar 2021

DBS is bullish on Hong Kong stocks. The Singapore-based lender believes the market could reach a record high over the next 12 months despite the recent reversal.

Hong Kong stocks are in correction mode, having fallen for five straight days. The benchmark has eased more than 10 per cent from its recent high on February 17.

However, DBS forecasts the Hang Seng Index could reach the 33,400 level over the coming 12 months. The benchmark peaked at 33,154.12 on January 26 in 2018.

“As the economy recovers and unemployment improves, both growth and value stocks will see good performance in terms of fundamentals,” Dennis Lam, Hong Kong and China equities strategist at DBS, said at a media briefing on Thursday.

“After the market digests recent worries, we believe the focus will shift back to earnings per share recovery and economic recovery. The recent sell-off was overdone and is a buying opportunity,” Lam said.