EB SECURITIES released a research report stating that the A-share market remains in a bull phase overall, though short-term volatility may increase. Compared to previous bull markets, current indices still have significant upside potential. However, under the policy guidance of a "slow bull" market, the duration of the rally may outweigh the magnitude of gains. In the near term, the market may lack strong catalysts, and with some investors adopting a more conservative approach toward year-end, equities are likely to consolidate.
Key observations from EB SECURITIES are as follows:
**A-shares and Hong Kong Market Performance in November** In November, major A-share indices mostly declined. Influenced by overseas expectations and reduced risk appetite, the STAR 50 Index fell the most, dropping 7.1%, while the SSE 50 Index saw the smallest decline of 1.3%. Sector performance diverged, with diversified holdings, banking, and media leading gains.
Hong Kong’s market also fluctuated in November due to shifting expectations around Fed rate cuts and concerns over AI sector bubbles. As of November 26, the Hang Seng HK 35, Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng Composite Index, and Hang Seng Tech Index posted returns of 1.1%, 0.1%, -0.1%, -0.7%, and -4.9%, respectively.
**A-share Outlook: Bull Market Persists Amid Near-term Volatility** The broader bull trend remains intact, but short-term consolidation is expected. While indices have room to rise further, policy emphasis on sustainable growth suggests duration matters more than speed. Near-term catalysts may be limited, leading to range-bound trading.
For allocation, defensive and consumer sectors are favored in the short term, while TMT and advanced manufacturing remain key medium-term plays. During consolidation, lagging sectors like high-dividend and consumer stocks may outperform. In a liquidity-driven market, TMT often leads; if fundamentals take over, advanced manufacturing could shine.
**Hong Kong Market Outlook: Focus on "Barbell" Strategy** With potential Fed rate cuts in December, Hong Kong equities may continue their upward trajectory. The market’s strong profitability, coupled with scarce assets like internet, new consumer, and biotech stocks, supports long-term appeal. Despite recent gains, valuations remain attractive.
A "barbell" strategy is recommended: 1) Focus on domestically supported sectors like semiconductors and advanced manufacturing amid U.S.-China tensions. 2) Select internet firms with independent growth drivers. 3) Maintain exposure to high-dividend, low-volatility sectors such as telecoms, utilities, and banking for stable returns.
**Risks:** Policy delays or unexpected macroeconomic shocks could disrupt the outlook.
Comments