Core Viewpoint - HSBC analysts predict that the Hong Kong stock market will maintain strong momentum through 2026, marking the best performance since 2017, driven by improving earnings and consumer confidence [1] Group 1: Market Performance - The Hong Kong stock market has recorded its best gains since 2017, indicating a robust upward trend [1] - Analysts express increased confidence in the market's momentum due to strong supporting factors [1] Group 2: Real Estate Market - A new emerging trend is the recovery of the real estate market, with property prices expected to rise by 5% in 2025 [1] - The residential market's stabilization is seen as a positive factor for profit growth, as it helps restore consumer confidence and boost consumer spending [1] Group 3: Consumer Spending - Consumer spending has shown signs of recovery over the past three months, contributing to the overall positive outlook for the market [1]

Core Insights - The Hong Kong stock market experienced significant performance in 2025, with the Hang Seng Index rising by 27.77%, marking its best annual performance since 2017 [1] - The Hang Seng Tech Index recorded a 23.45% increase for the year, representing its highest annual growth since its inception in 2020 [1] Market Performance - On the last trading day of the year, the Hang Seng Index fell by 0.87%, while the Hang Seng Tech Index decreased by 1.12% [1] - The sectors that saw the largest declines included healthcare, finance, and consumer industries, whereas the metals sector showed resilience with an upward trend [1]

Group 1 - Prusik Investment Management has seen substantial returns due to its strategic investments in Hong Kong's real estate and conglomerate stocks, which were previously undervalued [1] - The flagship fund of Prusik Investment Management, with a size of $787 million, allocates over one-third of its capital to Hong Kong companies, while the MSCI Asia Pacific (ex-Japan) index has a Hong Kong allocation of just over 5% [1] - The fund has outperformed 95% of its peers this year, benefiting from a strong rebound in the Hong Kong stock market after years of decline influenced by U.S. Federal Reserve policies and a slowing Chinese economy [1][4] Group 2 - As of July 23, the Prusik Investment Asia Equity Income Fund has achieved a return rate of over 19% for 2025, with a cumulative return of over 250% since its inception at the end of 2010, significantly surpassing the MSCI benchmark index's increase of approximately 106% [4] - Key holdings for the fund in the first half of 2025 include Cheung Kong Holdings, First Pacific, and Jardine Matheson, with Hong Kong stocks still trading at lower price-to-earnings and price-to-book ratios compared to regional peers [4] Group 3 - The sentiment towards Hong Kong among global investors is shifting positively, driven by the revaluation of Chinese tech stocks, a surge in new listings, and China's economic resilience in the face of U.S. tariffs, pushing the Hang Seng Index to a near four-year high [5] - The company maintains an optimistic outlook for Hong Kong, suggesting that the current market rally may not be over yet [5] Group 4 - The company has increased its investments in Southeast Asia, particularly in Indonesia, Thailand, and the Philippines, which have experienced significant volatility due to global investor concerns over political noise and tariffs [8] - Indonesia's economy is growing at approximately 5%, with attractive dividend yields of 6% on stocks, focusing on consumer and financial sectors while avoiding cyclical sectors like cement and non-dividend-paying internet companies [8] - The company identifies stocks with price-to-earnings ratios of only 5-6 times that possess growth potential and strong management, indicating a significant discount compared to their expected valuations of 10-15 times [8]

Group 1 - The Hong Kong stock market closed with the Hang Seng Index down by 0.57% [1] - The Hang Seng Tech Index also experienced a decline, closing down by 0.70% [1]