Following former U.S. President Trump's nomination of Kevin Warsh for the next Federal Reserve Chair, which dampened market expectations for interest rate cuts and caused the U.S. dollar to rebound from losses, the Hong Kong stock market's upward momentum stalled after hitting a peak. Dominic Chiu, Head of Discretionary Portfolio Management Asia at Lombard Odier, stated that the Hang Seng Index is expected to reach around 30,000 points this year, implying a potential high single-digit percentage upside from current levels.
He pointed out that investors' confidence in the Federal Reserve's independence has recently wavered, and while the general trend for the U.S. dollar is expected to remain depreciatory, the pace of depreciation is likely to slow. Regarding A-shares and Hong Kong stocks, he noted that the pace of capital inflows into Hong Kong stocks has slowed compared to last year, with net inflows from the north also showing a slight decrease, suggesting a more gradual bull market pattern; he anticipates potential policy support emerging from the upcoming "Two Sessions."
He indicated that the Hang Seng Index is expected to reach around 30,000 points this year, implying a potential high single-digit percentage upside from current levels. However, he also mentioned that inflows into emerging markets have been volatile, but believes the overall positive trajectory remains intact—volatility persists, yet the broader direction is still favorable.
Regarding the recently volatile gold prices, he noted that demand for gold has increased significantly, from central banks to institutional investors, as a hedge against geopolitical risks, and the firm will maintain its overweight position on gold. Conversely, he views silver's volatility as excessive and unsuitable for inclusion in wealth allocation portfolios.
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