Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

The vast majority of retail client accounts lose money when trading CFDs.

You should consider whether you can afford to take the high risk of losing your money.

The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Hang Seng Index Forecast for 2023

The year 2022 is coming to a close with a rebound in the Hang Seng index. This is our outlook for 2023 in Hong Kong’s blue-chip stock index

Asian stocks have closed the year out with a rally as the covid rules are scrapped in China and Hong Kong. The first quarter may be slow but look for the indices to gather steam as economic data catches up. 

HK50 – Monthly Chart

HK50 – Monthly Chart

In the HK50, we can see on the monthly chart that support has been found at a strong zone between 16,000-18,000. The index may look to consolidate recent gains and dip, but the low could be in place for 2023. 

Morgan Stanley analysts are now overweight on Asian emerging-market stocks versus developed markets from being “more confident that a new bull cycle is beginning.” Nomura analysts also see the expected recessions in the West allowing Asia to outperform as stocks provide cheaper valuations and a better fundamental outlook. 

For growth in the year ahead, Goldman Sachs sees potential Chinese growth of 4.5% in 2023, compared to 3.3% in 2022. Meanwhile, Morgan Stanley estimated that GDP growth will be 5.4% in 2023. Those estimates were made before the recent reopenings. 

Hong Kong followed China by dropping almost all its Covid restrictions this week. From Thursday, visitors will no longer have to do mandatory PCR tests. The vaccine pass system will also be scrapped, but compulsory masks in public places will continue. This is a dramatic move for the city and will impact the global economy. 

One headwind for Hong Kong may be the US dollar peg to the HK dollar. Hedge fund manager Bill Ackman said: “The peg no longer makes sense for Hong Kong and it is only a matter of time before it breaks.” Some are questioning whether it is time to stop importing US economic policies. Hong Kong is now more synchronised with China. Still, Hong Kong’s interest rates rose from 0.5% to 4.75%, following the US Federal Reserve, when the city’s economy was weak and China was in lockdown. 

Investors need to remember the more significant macro issues surrounding the peg for the year ahead and focus on buying top Hong Kong stocks at these valuations. Traders can also gain by looking for upside rallies with more critical Chinese economic data.

Last Updated: 30/12/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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