The 2025 Analyst Conference, known as the "Oscars" of the capital markets, kicked off recently. On November 28, Li Bei, founder of Banxia Investment, delivered a keynote speech at the event, outlining the three evolutionary phases of a bull market and presenting a forward-looking prediction on global capital migration.
Li Bei stated that A-shares and Hong Kong stocks have now entered the first phase—valuation recovery—and will gradually transition into the earnings verification phase before ultimately ushering in a full-fledged bull market driven by wealth effects, domestic savings reallocation, and global capital inflows. She projected that in two years, as China's economy rebounds and U.S. growth momentum weakens, global capital is likely to initiate a new wave of allocation shifts toward Chinese assets.
Li Bei clearly mapped out the three-phase path of a bull market: **Phase One: Valuation Recovery** Currently, the undervaluation of equities relative to fixed-income markets has been partially corrected, with risk premiums returning to mid-range levels but not yet reaching extremes. This phase tests market confidence, as investors await concrete improvements in economic data and corporate earnings before committing further—a core driver of the second phase.
**Phase Three: Wealth-Effect-Driven Reallocation** The third phase will inevitably see explosive growth fueled by wealth effects—household savings shifting into equities, domestic asset reallocation, and global capital returning to China. This trend is not coincidental but meets three key conditions for an international bubble: low interest rates, clear profit opportunities, and a lack of attractive investments in other major economies.
To support her argument, Li Bei cited historical parallels: "The 2006-2007 A-share bull market peaked when the U.S. housing bubble burst and stocks stagnated, making China the world’s most attractive destination. Today, the resilience of U.S. stocks stems from China’s deflationary cycle diverting global capital to America."
Looking ahead, Li Bei made a bold forecast: "In two years, China’s economic recovery (a high-probability scenario) will showcase the renewed profitability and vitality of its supply-side-reformed enterprises. Meanwhile, the U.S. may face slowing AI investments, unsustainable fiscal deficits, and waning policy stimulus. These factors could trigger a historic global capital migration back to China."
Her analysis, blending bullish views on Chinese core assets with a macro perspective on capital flows, sparked lively discussions on cyclical shifts and reallocation opportunities among attendees.
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