Tags: Hang Seng | 50000 | 2015 | Garner

Morgan Stanley's Garner: Hang Seng Index Will More than Double by 2015

By    |   Wednesday, 22 May 2013 07:59 AM

The Hang Seng Index of Hong Kong stocks will more than double in the next 2 ½ years or so amid global central bank easing, says Jonathan Garner, chief Asia and emerging market equity strategist for Morgan Stanley.

The Hang Seng jumped 1.8 percent to a three-month high of 23,493 points Monday, and he predicts it will hit 50,000 by the end of 2015.

"These peaks in the Hang Seng tend to happen every six to eight years, and they tend to happen when global growth is accelerating, [and] when liquidity is still full on from the Fed and the BoJ [Bank of Japan]," Garner told CNBC.

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"It also happens when we start from relatively low valuations, which is where we are right now."

The Hang Seng has one of the lowest price-earnings ratios in Asia — about 11, compared with just under 24 for Japan's Nikkei 225 Stock Average and 17 for Taiwan stocks, according to CNBC.

"When we look at actual valuations, the underpinning for stock market gains is absolutely there. And when you look out to 2015, ... we're not expecting the global liquidity to be turned off," Garner said.

Some Asian stock analysts say improving U.S. economic data are helping Asian shares.

“The numbers continue to confirm a recovery,” Mark Matthews, head of Asia research at Bank Julius Baer, told Bloomberg.

The ascent by equities this year “will continue," he said. "It’s a steady improvement in the data, and the next step is to see stronger evidence of a consumer recovery. Stocks are not too expensive.”

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The Hang Seng Index of Hong Kong stocks will more than double in the next 2 ½ years or so amid global central bank easing, says Jonathan Garner, chief Asia and emerging market equity strategist for Morgan Stanley.
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2013-59-22
Wednesday, 22 May 2013 07:59 AM
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