Everbright Sun Hung Kai Asset Management: Neutral optimism towards Hong Kong stocks, not ruling out the possibility of rising to the 20,000 point level in the next 12 months
Everbright Asset Management's Chief Investment Strategist stated a preference for US stocks, predicting a 12% increase in US stock earnings over the next 12 months, with the technology sector expected to grow by 25%. A neutral optimistic attitude is held towards Hong Kong stocks, with the potential to rise to the 20,000 point level in the next 12 months, but other factors such as Chinese policy implementation need to be considered. Regarding bond investments, if the US enters an interest rate reduction cycle, bond prices will attract investors. Overall, there is an optimistic outlook for US and Hong Kong stocks, but other influencing factors need to be monitored
According to the information from the Wise Finance APP, Gong Weiyi, Chief Investment Strategist of Wing Ming Asset Management (Hong Kong), stated that she maintains a preference for US stocks in the second half of the year. The main reason supporting US stocks is the corporate profit momentum, with an average forecasted earnings growth of 12% per share in the next 12 months, and the technology sector approaching a growth of 25%. She is neutral-optimistic about Hong Kong stocks, not ruling out the possibility of Hong Kong stocks rising to the 20,000 point level in the next 12 months, depending on other factors such as whether the Third Plenary Session of the CPC Central Committee in July will introduce policies that significantly support the economy.
She mentioned that despite the cumulative increase in US interest rates exceeding 5% in the past, due to the ideal fundamentals supporting corporate performance, the earnings of companies in the last quarter, except for leading technology companies, have performed well. In the S&P 500, 80% of companies have exceeded market expectations. Looking ahead, the average forecasted earnings growth in the next 12 months is expected to be 12%, with the technology sector showing a growth closer to 25%.
She is neutral-optimistic about Hong Kong stocks, believing that the current valuation of Hong Kong stocks is still close to a 10-year low. She does not rule out the possibility of Hong Kong stocks rising to the 20,000 point level in the next 12 months, but this would require other factors to align, such as whether there will be more policies introduced at the upcoming Third Plenary Session, whether there will be more loosening policies in the real estate market, and whether the downward trend of Chinese state-owned enterprises' stocks will be reversed.
She also mentioned that the interest rates on US 10-year and 2-year bonds are close to the highs seen after the 2008 financial crisis. If the US enters an interest rate reduction cycle by the end of the year, bond prices would become relatively attractive. Based on past experiences of multiple interest rate reduction cycles in the US, bond performance has been positive. As a medium to long-term investment, investors should consider a diversified investment approach with a mix of stocks and bonds