$Hang Seng Index (800000.HK)$ Financial News: Citi expects H...

$Hang Seng Index (800000.HK)$ Finance | Citigroup expects the Hang Seng Index to reach 28,000 points by the end of this year.

Citi's investment strategy department and global wealth planning department director of investment strategy and asset allocation, Liao Jiahao, expects the Hang Seng Index to reach 26,000 points and 28,000 points respectively by mid-year and the end of 2025. He points out that the mainland and Hong Kong stock markets are bullish at present, but he is confident in the mainland's policy boost, expecting the macroeconomic environment to improve following the policy 'combo' in September last year, supporting the positive trend of the two stock markets.

Given the policy vacuum before the Two Sessions in March, Liao Jiahao believes that the current market lacks focus, leading to fluctuations in the Hong Kong stock market. However, investors do not need to be too pessimistic about the mainland and Hong Kong stock markets. Citigroup expects the mainland to introduce a 3 trillion yuan consumption stimulus policy, along with recent improvements in the domestic housing market. With China's macroeconomic conditions improving, profits of Chinese stocks are expected to turn positive. In addition, Chinese companies actively reward shareholders through buybacks, among other means, which is also a positive factor.

Liao Jiahao believes that policy efforts will help boost Chinese stocks. As A-shares are more directly benefited from policy stimulus, he is more bullish on A-shares than H-shares. He urges investors to choose sectors that align with national policies, namely domestic stocks that can benefit from Chinese policy stimulus, mainly due to greater profit growth potential. In addition, under the shadow of tariffs, the bank does not prefer export-oriented stocks. He estimates that the internet, consumer, technology, and industrial sectors will perform better, as they face less policy headwinds, and he expects the mainland real estate market to stabilize this year.