The Hang Seng Index opened up 0.02%, while the Hang Seng TECH Index dropped 0.14%.
The Hang Seng Index opened up 0.02%, while the Hang Seng TECH Index dropped 0.14%. AIA rose nearly 4%, and TENCENT increased over 2% after earnings.
About the future of the Hong Kong stock market.
Hong Hao, CEO and Chief Global Asset Allocation Officer of Huafu International, indicated that Hong Kong stocks will reach new highs. In March, we saw a new high of 24,874 points (the highest in nearly three years). I believe we will see a second new high around the third quarter, surpassing 24,000 points. The Technology, Consumer, and Medical Care sectors are relatively attractive, whether due to national policy support for Technology and Consumer or their own profit growth and valuation.
Cathay HAITONG SEC indicated that reviewing past periods of Hong Kong stocks outperforming is not difficult to find that the economy, liquidity, and technology are essential factors for significant rises in Hong Kong stocks. Looking ahead, with substantial progress in US-China trade negotiations, tariff risks easing, and a series of incremental policies being implemented, the macro economy is expected to stabilize. At the same time, domestic interest rate cuts and monetary easing have already taken effect, maintaining liquidity, and southern capital might continue to flow into the Hong Kong stock market. The current valuation of Hong Kong stocks is at a historically low level, indicating high mid- to long-term investment value. Additionally, since the beginning of the year, DeepSeek has sparked the AI market, with several leading Hong Kong tech companies exceeding expectations, making Technology the main line of the market. Under the influence of these three factors, a favorable trend for Hong Kong stocks may occur again.
Yang Chao, Chief Analyst of Strategy at China Galaxy Securities, stated that the benefits of domestic interest rate cuts and reductions have already been realized, and the policy effects will gradually show, likely boosting the earnings performance of Hong Kong stocks. The current valuation of Hong Kong stocks is at a historically low level, and the mid- to long-term investment value remains relatively high. In terms of allocation, Yang Chao recommends focusing on Consumer, Technology sectors, and sectors with lower trade dependence and higher dividend yields in the short term.
Citigroup issued a report predicting moderate government stimulus policies to boost the domestic economy will be more relevant to the Consumer, Internet, Resources, and Technology industries. The bank believes that the mainland and Hong Kong stock markets do not appear expensive and are slightly below historical averages, thus maintaining a constructive view. The bank upgraded the Consumer sector to 'Shareholding' and prefers domestic stocks, hoping to gain potential benefits from government stimulus measures; it downgraded the Transportation sector to 'Neutral' based on rising trade tariffs in the USA. The bank also likes large Internet stocks and Technology stocks benefiting from government policy support. The bank raised the year-end target for the Hang Seng Index from 24,500 points to 25,000 points, and the mid-year target for next year to 26,000 points. The MSCI Chinese Index's year-end target was raised from 78 points to 79 points, with a mid-year target for next year at 82 points.
Everbright believes that from a valuation perspective, Hong Kong stocks offer high investment cost-effectiveness. With strong domestic policies and reduced overseas disturbances providing dual support, the Hong Kong stock market is expected to continue its oscillating recovery pattern.
This article is reproduced from "Tencent Watchlist," edited by Zhicheng Finance: Jiang Yuanhua.
