Morgan Stanley cut Hang Seng target to lowest since 2008 financial crisis
Morgan Stanley cut Hang Seng target to lowest since 2008 financial crisis

Morgan Stanley cut Hang Seng target to lowest since 2008 financial crisis

 

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Morgan Stanley slashed targets for the Hang Seng Index, expecting the benchmark to drop to as low as 12,200 in the worst scenario, a level last seen during the 2008-2009 financial crisis.

For the HSI, the targets for the bull cases is raised by 38.7% to 21,400, while the base case was cut by nearly 13% to 16,900 from 19,400 points, said the bank in a note.

The target cuts reflect heightened volatility and higher compensation for taking risks after the Communist Party Congress, strategists said.

Market volatility is expected to increase in the short and medium term, mainly due to uncertainties in mainland China’s policy and economic outlook, geopolitical tensions and the impact of zero-Covid policy, it said.

The bank cut the base scenario target price for the Hang Seng China Enterprises Index by 13.3% to 5,680, cut the target price in the bear scenario by 26.8% to 3,840, while raised the target price for the bull cases by 33.5% to 7,000.

For the CSI300 Index, Morgan Stanley raised the base case target price by nearly 16% to 4,210, with the bear and bull case target prices at 3,000 and 5,030, respectively.