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2008 HangSeng Index Forecast
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Revised Date: 2008-9-15
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Statistics
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30-Apr-07
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30-Apr-08
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Change %
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Month-end Index
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20318.98
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25755.35
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26.76%
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Month-end Weighted Avg P/E
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15.36
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15.5
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Index points per P/E
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1322.85
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1661.64
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25.61%
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HangSeng Index Forecast (08/4-09/3)
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P/E
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Points
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Fair Value
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15.00
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24,925
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Trough Value
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10.00
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16,616
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Peak Value
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20.00
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33,233
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Analysis
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1）Weighted Avg P/E comes from hsi.com.hk. Since all listed companies
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announce annual reports by April every year, the month-end figure of
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April can be used as the benchmark of the previous year's performance.
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2）Calculation: April month-end HSI / April month-end Avg P/E
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= Index points per P/E
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3) The difference of two years' Index points per P/E shows the average
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growth rate of profit of Hongkong stock market.
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The first table above shows a profit growth rate of 25.61% between 07
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and 08, by ignoring all new listings, unlistings, the change of
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equity size, etc..
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4) By the widely adopted rule, the fair value of P/E of HK stock market
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is set at 15, with trough value at 10 and peak value at 20.
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5) In one year's time, the fair value of HSI will be 24925, with a
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fluctuation between 16616 and 33233.
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* 1661.64 x 15 = 24925
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References
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http://main.hsi.com.hk/hsicom/c_table/c_mnpehsi.html
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http://hk.finance.yahoo.com/q/hp?s=%5EHSI
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