StanChart sees Hang Seng Index at 26,600, flags AI policy and oil prices
Standard Chartered forecasts the Hang Seng Index reaching 26,600 points over 12 months, with potential upside to 28,000–29,000 if Chinese AI support grows or oil falls to US$70. Geopolitical risks could lower the target to 21,500–22,500. The bank also predicts US Treasury yields and yuan exchange ra
Standard Chartered’s Wealth Solutions Chief Investment Office has forecast the benchmark Hang Seng Index will reach 26,600 points over the next 12 months, according to the bank’s chief investment officer for North Asia, Raymond Cheng. The index could climb further to between 28,000 and 29,000 points if Chinese artificial intelligence policy support increases or oil prices ease to about US$70 (HK$546) per barrel.
On oil, the bank raised its three-month forecast for New York crude to US$100 per barrel and its 12-month forecast to US$80 per barrel. Cheng warned that if geopolitical tensions worsen, regulatory sanctions escalate, or oil prices break above US$120, the Hang Seng Index target could be lowered to 21,500 to 22,500 points, though he described the probability of that scenario as relatively low.
The bank expects the 10-year US Treasury yield to hold at 5 per cent to 5.25 per cent in the near term before easing to 4.75 per cent to 5 per cent over the next 12 months, noting that current levels offer an attractive entry point for investors to position in the bond market. As the US Federal Reserve further tightens monetary policy, Cheng expects the US dollar index to reach 100.2 in three months and 98 in 12 months. He predicted the Fed would raise rates by another 50 basis points before mid-next year, then shift to cuts in the second half as inflation moderates.
Cheng also expects the European Central Bank to raise rates once more and the Bank of Japan to raise rates up to three times. The bank forecasts the offshore yuan will reach 6.7 in the next three months and 6.67 in the next 12 months.
Lloyd Chan, head of investment strategy for Hong Kong at Standard Chartered, expects the People’s Bank of China to continue guiding moderate appreciation through its central parity pricing. Chan noted that mainland exports grew 25 per cent year on year in August, maintaining high-speed growth for four consecutive months, with high-tech exports continuing to grow. He expects the trade surplus to continue rising, providing structural support for the yuan exchange rate.