Morgan Stanley Investment Management: Expect more positive factors in the Hong Kong stock market in the fourth quarter
Morgan Asset Management stated that it expects more positive factors in the Hong Kong stock market in the fourth quarter. Last week, the Hong Kong stock market remained stable, with a weekly increase of 81 points, and the market is focusing on the Third Plenary Session to be held next week. The net inflow of Northbound funds last week was HKD 10.9 billion, with China Construction Bank and Industrial and Commercial Bank accounting for more than half. Morgan Asset Management believes that domestic interest rates and bond yields are relatively low, cash returns are not high, but still attractive to Northbound funds. In terms of stock selection, the old economy sector and high dividend stocks have performed steadily, while consumer stocks need to pay attention to consumer spending power. Investors may consider adding positions in the Hong Kong stock market after observing for a period of time. It is expected that there will be more positive factors in the stock market in the fourth quarter
According to the information from the Wise Finance app, Morgan Asset Management stated in a report that as we enter the second half of the year, the Hong Kong stock market started the week with fluctuations towards stability last week, ending the week up 81 points or 0.5%. The market is eagerly awaiting the Third Plenum scheduled for next week. Xu Changtai, Chief Market Strategist for Morgan Asset Management Asia Pacific, believes that the Third Plenum is a long-term strategic indicator, with less focus on short-term macroeconomic policies. Therefore, the market and investors have low expectations for policy outcomes this time, with more surprises expected than high hopes. Those looking to increase their exposure to Hong Kong stocks may want to wait for a while.
Beishui recorded a total net inflow of HKD 10.9 billion over the past 4 trading days last week, with China Construction Bank (00939) and Industrial and Commercial Bank of China (01398) accounting for HKD 5.8 billion, more than half of the total. Xu Changtai also believes that the inflow of funds into mainland banks is related to the low interest rates and bond yields in the mainland, as well as the relatively low cash returns. Even though the dividend yield has fallen from the high level of around 8% in the past few months, it remains attractive to Beishui.
He pointed out that stock selection will still focus on traditional economy sectors and high dividend stocks, both of which have shown stable performance in the past six months. Consumer stocks such as e-commerce and internet leaders, although profitable, require further strengthening of consumer purchasing power. It remains to be seen whether there will be an improvement in consumer spending during the upcoming Double 11 shopping festival and year-end peak season.
Xu Changtai believes that if investors want to increase their exposure to the Hong Kong stock market at this time, it may be advisable to wait for a while longer. The probability of a rate cut by the Federal Reserve in September may not be as high as expected by the market. If one or two economic data points improve further, the timing of the rate cut may be postponed to December. Additionally, with the U.S. presidential election scheduled for the fourth quarter, it may be better to enter the market after uncertainties have subsided. It is expected that there will be more positive factors in the stock market in the fourth quarter