STANCHART: Chinese stock market valuation is already very low, optimistic about non-essential goods and technology sectors.

Zhitong App learned that Stanley Chong, Chief Investment Officer of Standard Chartered North Asia, said that the performance of Hong Kong stocks last year was affected by factors such as the rate hikes by the Federal Reserve, and there are still uncertainties in mainland China's policies. It is expected that the US rate hike cycle will end in the next 12 months, and the current negative factors are fewer than last year. The rate adjustment will also support Hong Kong property stocks and the performance of the Hang Seng Index. It is recommended to maintain an "overweight" position in mature market government bonds and raise the overall view of global stocks to "overweight". The valuation of the Chinese stock market is already very low, so a "neutral" allocation is given to Chinese stocks. The communication and non-essential goods sectors in China are given an "overweight" rating, and the rating of the technology sector is raised to "overweight". In addition, the ratings of the healthcare management and utilities sectors are raised to "neutral".

Chong said that although there have been positive news for mainland property developers in the past month or two, the problem of lack of cash flow for developers has not been fully addressed. It is expected that measures targeting developers will be taken in the future, which is expected to greatly boost the market.

Chen Zhengluo, Senior Investment Strategist at Standard Chartered Hong Kong Wealth Management, said that the US dollar is expected to depreciate moderately, and it is expected that the US dollar will fluctuate narrowly in the next 3 months. The market has already reflected expectations of interest rate cuts. With the further slowdown of the US economy, the US dollar may moderately decline in the next 6-12 months. The target for the US dollar index in the next 3 months is 102, and in the next 12 months it is 100. The euro, Australian dollar, and Japanese yen may become the main beneficiaries of the weakening US dollar. Japan may tighten monetary policy in the first quarter, supporting the narrowing of the US-Japan interest rate differential. It is expected that the USD/CNY exchange rate will reach 7.16 in the next 3 months, and 7 in the next 12 months.