Improved liquidity in Hong Kong's financial market is favorable to the Hong Kong stock market, according to a research report released by BOCI. Hong Kong's stock market recorded growth amid volatility YTD, with average daily turnover reaching $240.9 billion as of 3 June, much higher than $110.4 billion in the same period of last year and $131.8 billion in the whole 2024.

For the investment outlook for 2025, BOCI remained optimistic on the Hong Kong stock market, and anticipated that key policy makers will continue to introduce monetary, fiscal, property and stock market policies to offset the impact from US President Donald Trump's potentially unfavorable policies. The broker maintained its HSI forecast at 25,700 by the end of 2025.

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In terms of investment advice, BOCI recommended focus on the IT and high-end manufacturing sector, as the success of DeepSeek will boost China's confidence in the development of high technology and high-end manufacturing industries.

Looking ahead, China will place greater emphasis on enhancing its technological innovation capabilities, which are critical to long-term sustainable economic growth. China is at a critical stage of economic transformation, and developing technological innovation or the IT sector could be a driving force for economic development and help solve structural problems in the economy.

Meanwhile, investors can focus on stocks benefiting from domestic demand growth, high dividend yield stocks and actively traded stocks for the southbound link.

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