DBS Bank's Hong Kong Chief Investment Office (North Asia) Investment Strategist Lin Zixuan has expressed an "overweight" stance on mainland China and Hong Kong stock markets, continuing to favor the future performance of A-shares and believing they will outperform Hong Kong shares. Regarding the recent improvement in the Hong Kong market, he analyzed that this is primarily driven by two major factors: first, market concerns about a Federal Reserve interest rate hike within the year have eased, and second, the previously overly concentrated long positions in global technology hardware are beginning to diversify, with the market starting to invest in sectors beyond hardware, thereby giving a boost to Hong Kong's tech sector. Despite this, as the overall profitability of hardware stocks has not deteriorated, DBS continues to favor the related sector. Considering the richer selection of relevant targets in the A-share market, the bank has a higher preference for that market. On a macro level, DBS judges that the Federal Reserve will not cut interest rates this year. Although the gold price has seen a recent pullback, DBS views this merely as a short-term unwinding of speculative funds, with gold poised to reassert its role as a safe-haven asset. Supported by long-term drivers such as central bank gold purchases, DBS expects gold to still have room to rise this year, potentially reaching $5,300 per ounce by year-end.
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