At the beginning of 2025, the Hong Kong stock market was shrouded in gloom, and investor enthusiasm seemed to be dampened by this chill.In the first week of the year, Hong Kong stocks were not immune to the weakness of the Chinese market as a whole, with $HSI(HSI)$ alling below the 20,000 point mark in one fell swoop.With the exception of the energy sector, which was a bit stronger, the rest of the sectors suffered, with multi-financials, insurance and banks leading the losses. $HSTECH(HSTECH)$
From the market trend, the recent economic data is not good, manufacturing PMI fell, production, business activity is expected to decline, "trade-in" policy is weak, construction investment is weak, external demand and the real estate market also continued to be downturn, a lot of signs show that the internal growth momentum is not enough!
At the same time, the external environment is even worse, the strong U.S. dollar, U.S. bonds running high, but the rapid decline in Chinese bond rates, the U.S.-China interest rate spreads continue to widen, the weakening of the yuan, leading to the accelerated withdrawal of active foreign capital.The change in treasury rates reflects the market's expectation of monetary policy easing, but also reveals concerns about economic growth and investment returns.Historical experience has shown that a widening of the US-China interest rate spread tends to pressurize the market and cause capital outflows.
Then look at the market outlook, when it is in a policy window, and Trump's inauguration is imminent, tariff policy variables are quite a lot.Although the gradual increase in tariffs has a limited impact, but once the top of the levy, the market is bound to fluctuate significantly.However, the time of great volatility may also contain investment opportunities.
In addition, to solve the problem of credit contraction should not be delayed, the current key is to suppress the cost of financing, fiscal policy is urgent.However, the existing scale of fiscal policy and the measured need for 7-8 trillion yuan of broad spending there is a gap, which makes the market although the bottom of the support, but it is difficult to open the upward space for a while.
However, the Hong Kong stock market is not without bright spots.
From the valuation point of view, the Hang Seng Index price-earnings ratio of about 9 times, compared with other major markets around the world, is undoubtedly a very attractive value of the depression, once the market picks up, the valuation of the repair space is huge.
On the policy level, the decision makers' determination to stabilize the economy is unwavering, and a series of policy initiatives such as hidden debt replacement, deficit adjustment, quasi-interest rate cuts, etc. are expected to be implemented, and consumer goods, real estate and other areas will also usher in the good, which will build a solid foundation for the Hong Kong stock market.
External risks are also easing the trend, Trump came to power after prioritizing domestic affairs, and the new Treasury Secretary from Wall Street, the possibility of negotiation between the United States and China to solve the problem increases, the impact on Hong Kong stocks may not be as serious as imagined.
In addition, the Federal Reserve interest rate cut is expected to gradually thick, which will constitute a favorable Hong Kong assets; the rise of China's advantageous industries, many star enterprises listed in Hong Kong stocks, the growth dividend is quite considerable; the policy of all-round escort, the mainland's economic fundamentals are solid, the south of the funds continue to influx, Hong Kong Stock Connect to enhance the discourse of the domestic capital, the high-dividend strategy to resist the fall of the absorption of gold, the part of the industry performance is bright, the Hong Kong dollar demand is strong, and the new policy to addmomentum, performance growth is expected to be reversed, market confidence is being steadily repaired.
Despite the weak sentiment of Hong Kong stocks at the start of the year, the bottom is solidly supported, and both opportunities and challenges exist.
Comments