Manulife Investment Management has assigned a "neutral" rating to mainland China and Hong Kong equities, with Luke Browne, Head of Asia Asset Allocation at Manulife Investment Management, indicating the firm's preference for Chinese stocks. While explosive returns are not anticipated, Browne believes Chinese equities present investment opportunities.
Cai Shangqin, Head of Asia Equity Investments at Manulife Investment Management, stated that China's economy is operating steadily, and Asian stock markets could benefit from a weaker US dollar. She noted China's increasing volume of high-value exports, including industrial equipment and new energy vehicles.
Under the upcoming 15th Five-Year Plan, China is expected to focus on high-tech innovation sectors such as artificial intelligence, advanced manufacturing, and renewable energy. Consequently, the firm is optimistic about Chinese technology stocks, particularly AI-related shares like semiconductors, and also favors advanced manufacturing, robotics, and healthcare stocks.
Shao Yuting, Senior Global Macro Strategist and Senior Director of Global Macro Strategy at Manulife Investment Management, anticipates the US Federal Reserve will implement three interest rate cuts this year. The first cut is expected before the Fed Chair transition in May, with the remaining two likely occurring in the second half of the year.
Shao also cautioned that incumbent Chair Jerome Powell might remain on the Federal Reserve Board after his term as Chair concludes, which could potentially lead to a more hawkish monetary policy stance from the Fed than the firm currently expects.
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