Hong Kong's financial markets have performed strongly YTD alongside the stabilization of the residential property market, driving consensus EPS growth and a normalization of P/E ratios, JPMorgan remarked in its report.

Looking ahead to 2H25, after the MXHK Index delivered an 18% return in USD terms in 1H (outpacing the MXASJ Index by about 5%), JPMorgan predicted that it would enter a short-term consolidation phase due to uncertainties around tariff risks, the possibility that Fed rate cuts might not materialize, insufficient stimulus policies, and the traditional August off-season.

Related NewsBofAS Elevates HKEX (00388.HK) TP to $520, Expects 31% Increase in 1H25 NP
To JPMorgan, this potential weakness would instead present a buying opportunity as robust equity financing activity, southbound capital inflows, and stablecoin innovation could push up revisions in earnings forecasts.

The broker's top picks included AIA (01299.HK)  -0.550 (-0.771%)    Short selling $251.14M; Ratio 10.689%   , BOC HONG KONG (02388.HK)  +0.300 (+0.836%)    Short selling $154.15M; Ratio 21.817%   , GALAXY ENT (00027.HK)  -0.350 (-0.921%)    Short selling $73.67M; Ratio 10.685%   , HKEX (00388.HK)  -3.400 (-0.759%)    Short selling $484.74M; Ratio 10.556%   , LINK REIT (00823.HK)  +0.150 (+0.344%)    Short selling $79.71M; Ratio 21.777%   , and TECHTRONIC IND (00669.HK)  -0.500 (-0.518%)    Short selling $85.47M; Ratio 14.702%   . For small- and mid-cap stocks, MGM CHINA (02282.HK)  -0.220 (-1.410%)    Short selling $3.91M; Ratio 5.208%   and CHINA STATE CON (03311.HK)  +0.060 (+0.503%)    Short selling $9.57M; Ratio 14.081%   were its preferred names.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-07-24 16:25.)