Goldman Sachs released a research report saying that it confirmed its "buy" rating on the Hong Kong Stock Exchange (00388), raised its target price from HK$341 to HK$345, and raised the company's earnings per share forecast for this year and next by 3% and 2%, reflecting the recent strong trading of Hong Kong stocks. The bank saw the bottom of the earnings per share cycleplaycandycrushsodaMore evidence, and the stock market P/E ratio is lower than the mid-cycle, providing attractiveplaycandycrushsodarisk reward.
The bank believes that there are three positive themes driving the stock price of the Hong Kong Stock Exchange, including three indicators that affect the transaction price of the Hong Kong Stock Exchange to rise. The average daily transaction price of the stock market in the 60-day has rebounded from a low of 87 billion yuan in the fourth quarter of last year to 120 billion yuan. The overall market value of Hong Kong and mainland listed shares compared with the gross domestic product (GDP) is lower than the mid-cycle level, which will bring huge room for growth while benefiting the macro economy and the profits of listed companies. In addition, transactions of derivatives traded in Hong Kong and London Metal Exchange-traded derivatives increased by 10% and 40% respectively.
In addition, the policy of expanding connectivity will expand the relevant profits of the Hong Kong Stock Exchange and make the Southbound Stock Exchange a greater driving force for stock market transactions. In particular, the reduction of dividend tax on southbound investors can further increase the participation of southbound investors. The Hong Kong Stock Exchange and the Securities Regulatory Commission are also studying the launch of treasury bond futures trading. The management of the Hong Kong Stock Exchange is also committed to improving stock market liquidity, citing the 2020 ETF bid-ask spread reform that doubled transactions in this part of the market.