Morgan Stanley has raised its price target for Hong Kong Exchanges and Clearing Ltd (HKEX) by 4.5% to HK$538 from HK$515, while keeping an Overweight rating on the stock. The bank expects the Hong Kong capital market upcycle to be more durable, supported by positive momentum in China's capital development cycle.

Looking ahead, the investment bank believes new equity issuances, rather than cash equities, will serve as the primary growth driver in the medium to long term. Morgan Stanley projects HKEX's overall average daily turnover (ADV) to reach HK$268 billion in 2026, HK$285 billion in 2027, and HK$300 billion in 2028, reflecting the strong year-to-date performance, anticipated faster trading velocity, and sustained capital market activity.

In tandem with these expectations, the bank has raised its forecasts for HKEX's trading fees and clearing fees, while also lifting its earnings per share estimates for 2026, 2027, and 2028 by 10.0%, 9.3%, and 9.1%, respectively.