HSBC: Lower Hong Kong Stock Exchange's average daily trading volume forecast for the next two years by 2.4% to HKD 373

On December 9th, Jinshi data reported that HSBC Global Research published a report, lowering the target price of Hong Kong Exchange (00388.HK) from HKD 382 to HKD 373, a decrease of 2.4%, and maintaining a ‘buy’ rating. The bank raised its 2024 earnings forecast for HKEX by 1.7%, lowered its 2025 and 2026 earnings forecasts by 3.5% and 1.5% respectively, mainly due to adjustments in average daily trading volume forecasts. The forecast for this year has increased slightly to HKD 130 billion, while the forecasts for 2025 and 2026 have been lowered to HKD 158 billion and HKD 174 billion respectively. The market price of HKEX is expected to have a P/E ratio of 28.9 times, which is 0.6 standard deviations below the long-term average. The report points out that recent feedback from clients regarding HKEX indicates that concerns about global trade and geopolitical risks have intensified, and expectations of interest rate cuts for the US dollar and Hong Kong dollar have weakened. However, the average daily trading volume (ADT) of A-shares remains at a relatively high level, partly reflecting the resilience of sentiment in the domestic capital market. RMB deposits and interbank interest rates are trending downward, which may support risk appetite. The premium of A-H shares is also significantly higher than the long-term average, indicating the relative attractiveness of H-shares valuation.