On January 15, the 2026 Global and China Capital Markets Outlook Forum was held in Beijing. Liu Gang, Managing Director of the Research Department at CICC and Chief Analyst of Overseas and Hong Kong Stock Strategy, attended the forum and delivered a speech on the outlook for global markets and the Hong Kong stock market.
Liu Gang stated that the current intense structural divergence and rotation in the market is essentially driven by excess liquidity, or more plainly, "too much money" chasing after scarce return assets that gain consensus, although the specific assets favored change at different stages. He suggested that investment strategies for 2026 should closely follow the direction of "credit expansion," which is the key factor determining capital flows. He mentioned that the Hong Kong stock market was given a Hang Seng Index target of 26,000 points last year. For 2026, under a baseline scenario, he projects a target range of 28,000 to 29,000 points, primarily because Hong Kong stock earnings growth may be relatively weaker compared to A-shares. However, he also pointed out that if fiscal policy is significantly strengthened, it could potentially open up further upside for the index. When comparing A-shares and Hong Kong stocks, Liu Gang believes that, considering overall fundamentals and liquidity, A-shares should be prioritized over Hong Kong stocks. However, he emphasized that allocating to Hong Kong stocks is typically not based on the overall market but rather on their unique structural opportunities. He advised investors to adopt a "structure over market" approach, thinking about structure first and then the market, and clearly identified that the distinctive structural opportunities in the Hong Kong market are mainly reflected in four sectors: First, AI remains a market theme; while A-shares focus more on hardware, Hong Kong stocks are more concentrated on the application end, such as major internet platforms, and the two can be allocated in combination. Second, high-dividend sectors still hold value for balancing portfolio volatility, and Hong Kong stocks have a relative advantage in this area. Third, cyclical sectors, including copper, aluminum, chemicals, construction machinery, and hardware tools related to the post-real estate cycle. He suggested focusing on these in the first quarter, with the logic stemming from potential demand-side stimulus in the US and domestic policy windows. Fourth, the consumer sector. Currently, there is a lack of strong fundamental logic supporting a broad recommendation, but a deep value and bottom-up stock selection approach can be used for挖掘. "One can afford to lose time, but not value," meaning holding quality individual stocks and waiting for value realization. Liu Gang concluded that the aforementioned four sectors serve as important bridges connecting allocation across the two markets. The common core logic behind all sector choices remains what he emphasized—"following the direction of credit expansion." He pointed out that regardless of whether credit expansion occurs domestically or overseas, capital will flow towards it.
Comments