Hong Kong shares are likely to rise about 17 percent this year, with gains weighted towards the latter half, as concerns over Chinese policy tightening ease, a Reuters poll showed.
The Hang Seng index, trading near flat so far this year, is seen rising to 27,000 by year-end, according to the median forecast of 23 strategists polled over the past week. This is lower than 27,500 forecast in a December poll. That 17 percent rise compares with the more modest 5.3 percent advance last year, although in the near-term the mood remains one of caution as Asian markets grapple with the aftermath of Japan's devastating earthquake.
Hong Kong shares started the year on a strong note, rising over 6 percent in the first three weeks although that rally hit a roadblock as spiralling Chinese consumer prices spurred the central bank to hike interest rates and curb bank lending.
With bank lending slowing in February and rising expectations that inflation will peak by mid-year, some analysts say market players should look to position themselves for the rebound.
"It is time to get more aggressive on the market as tightening may be nearing a peak and we could see stabilisation or easing in the second-half," said Francis Cheung, head of China/Hong Kong strategy at CLSA Asia-Pacific Markets.