Pursuits
UBS Cuts Hong Kong Stock Target 25% as Black Sky New Reality
- Slowing economic growth, falling tourism to weigh on earnings
- Valuations are still too high given outlook for profits
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UBS Group AG lowered its target for Hong Kong’s benchmark stock gauge by 25 percent, saying its worst-case scenario for the city is coming true as the economy weakens and tourism arrivals decline.
The Hang Seng Index will slide to 19,775 as slowing growth in the city and China weigh on corporate earnings, UBS analyst Spencer Leung wrote in a report dated Sept. 2. That’s a 5.5 percent drop from the last close and implies a 16 percent decline for 2015. In December, UBS’s target for the end of 2015 was 26,484 and the 19,775 level was the "black sky" of four possible outcomes.