iFast: There may be an opportunity for Hong Kong stocks to test 18,500 points; the stock selection strategy remains focused on high-yield Chinese stocks
iFast expects that the Hong Kong stock market may test 18,500 points in the short term, with a stock selection strategy focused on high-yield Chinese stocks, especially in the telecommunications sector. The Federal Reserve's stance on interest rate cuts will be a key factor, with the current probability of a 0.25% rate cut at 59%. If the Federal Reserve skips the rate cut, the renminbi may weaken, putting pressure on the Hong Kong stock market. The number of rate cuts next year will also affect capital flows
According to Zhitong Finance APP, the recent performance of Hong Kong stocks has been affected by external uncertainties, with the index falling below the 20,000 mark and showing little improvement. iFAST Global Markets Investment Director Wen Gangcheng expects that the central economic work conference to be held next month may not bring significant surprises. The Federal Reserve's stance on interest rate cuts will be another key factor, and the index may fluctuate within a narrow range in the short term, with a chance of testing the 18,500 point level. Therefore, the stock selection strategy will still focus on high-yield Chinese stocks, particularly telecommunications stocks, which are relatively stable. Since 6G has not yet been introduced and industry capital expenditure is low, they can be a preferred choice under stable revenue conditions.
The Federal Reserve will hold its last interest rate meeting of the year in late December. Futures indicate that the current probability of a 0.25% rate cut is 59%, while the probability of skipping a rate cut is 41%, leaving the direction of interest rates full of uncertainties.
He believes that the Federal Reserve's stance on interest rate cuts will be one of the key factors. "If the Federal Reserve skips a rate cut next month, the renminbi is likely to weaken, which will inevitably put pressure on Hong Kong stocks. In addition, the number of rate cuts next year is also very important. If the federal funds rate is still at 4% by the end of next year, funds may continue to flow to the United States."
In addition, local and international bank stocks such as HSBC (00005) and Bank of China Hong Kong (02388) will benefit from the slowdown in the pace of U.S. rate cuts, which is favorable for their stock prospects