BANK OF E ASIA(HK:00023) Zhi Tong Cai Jing·2025-12-16 11:57Economic Outlook - East Asia Bank projects Hong Kong's GDP growth to be between 2.5% and 3% in 2026, indicating a comprehensive economic recovery [1] - The bank has raised its target for the Hang Seng Index to 30,800 points, corresponding to an earnings target of HKD 2,400 per share, which reflects a price-to-earnings ratio of 12.8 times [1] Real Estate Market - The private residential property prices in Hong Kong recorded a low single-digit increase in 2025, with expectations for a further high single-digit growth in 2026, indicating a clear stabilization in the real estate market [1] - The interest rate environment is identified as a key driver for the real estate market, with expectations that the Hong Kong interbank offered rate (HIBOR) will remain below 3% for most of 2026 [2] Consumer and Retail Sector - Significant improvements in private consumption and retail sales have been noted, with retail sales reversing a downward trend since May 2025 and private consumption resuming growth from the second quarter of 2025 [2] - The value of retail sales is expected to see a high single-digit increase in the coming year, driven by an increase in visitors and the appreciation of the Renminbi [2] U.S. Economic Influence - The Federal Reserve is anticipated to implement 3 to 4 interest rate cuts in 2026, totaling 75 to 100 basis points, due to a weakening labor market and stabilizing inflation [3] - The S&P 500 index target for 2026 is projected at 7,500 points, reflecting a price-to-earnings ratio of 23.8 times, with a focus on sectors such as semiconductors, cloud platforms, and AI applications [3]