Hong Kong's benchmark Hang Seng stock index may be one of Asia's laggards, but Morgan Stanley reckons the market is poised to more than double to 50,000 by the end of 2015 on the back of ample liquidity in global markets.
The Hang Seng has gained about 4 percent so far this year and hit its highest level since early February on Monday, playing catch-up with gains in global markets following a holiday on Friday. Still, the gains pale in comparison to the 45 percent jump in Japan's Nikkei and double-digit increases seen in other Asian markets such as Australia or in Southeast Asia.
That underperformance has not swayed Morgan Stanley's chief Asia and emerging market equity strategist, Jonathan Garner, from changing his bullish call for the Hang Seng to hit 50,000 in 2015.
"These peaks in the Hang Seng tend to happen every six to eight years and they tend to happen when global growth is accelerating, [and] when liquidity is still full on from the Fed [U.S. Federal Reserve], the BOJ [Bank of Japan]," Garner told CNBC's "The Call" on Monday.
"And it also happens when we start from relatively low valuations, which is where we are right now," he added.
The Hang Seng is one of the cheapest equity markets in Asia, with a price-to-earnings ratio of about 11 compared with just under 24 for the Nikkei and around 17 for Taiwan stocks.
It rose to 23,512 on Monday, its highest level in almost four months.
"When we look at actual valuations the underpinning for stock market gains is absolutely there. And when you look at the outlook out to 2015, one crucial note from us is we're not expecting the global liquidity to be turned off," Garner said.
There is renewed talk about when the Federal Reserve will start to unwind its quantitative easing – the massive monetary stimulus that has fed the rally in global markets – amid more positive signs for the world's biggest economy.
"As and when th @DharaCNBCat happens it would be negative and nobody's saying the Hang Seng isn't volatile," Garner said. "It tends to have savage bear markets when liquidity is withdrawn. Our view is that it's too soon to talk about that."
(Read More: Markets Not Spooked by Fed 'Taper' Talk, Yet)
Garner added: "Also, the alternative asset for investing – property is being capped by the government, which is likely to benefit the stock market."
Hong Kong's government, like its counterparts in China and Singapore, has tightened regulations on the housing market in recent months to rein it in.
— By CNBC.Com's Dhara Ranasinghe; follow her on Twitter