In this Feb 26, 2021 photo, people walk past an electronic display showing the Hang Seng Index in the Central district of Hong Kong. (ISAAC LAWRENCE / AFP)
The Hang Seng Index is not expected to perform strongly in the coming six months, as the technology sector, which accounts for a large market share of the gauge, has underperformed over the past half-year, BOCOM International said on Tuesday.
The Hang Seng Index finished near its lowest point of the day following choppy trade on Tuesday
Hong Kong stocks have been in protracted weakness since June 2020, as technology stocks have extended their losing streak this year despite the Hang Seng Index Company expanded the weighting of Chinese technology stocks on the HSI last month, Hong Hao, managing director and head of research at BOCOM International, told a webinar press conference.
The HIS technology sector, Hong pointed out, has yet to fully emerge from the gloom of anti-monopoly laws.
Compared with previous years, Hong delivered a rather pessimistic outlook for the benchmark index, adding that it cannot be expected to exceed 30,000 points by the year-end.
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The Hang Seng Index finished near its lowest point of the day following choppy trade on Tuesday. The local benchmark opened 86 points higher but erased some gains in the afternoon session and closed down 179 points, or 0.6 percent, at 28,309 points.
Looking ahead, Hong said the growth sector will continue to be a drag in the second half of the year if it fails to fully meet the expected performance. He is firmly of the belief that the gauge reached its highest level for 2021 in the first quarter.
Hong said the current performance of the Hang Seng Index does not necessarily indicate a lack of investment opportunities. Segments such as proprietary pharmaceuticals in healthcare, domestic brands in the consumer sector, and technology hardware in the technology sector may spell more investment opportunities in the near future, he added.