Standard Chartered: Policy leans towards easing, continues to be optimistic about high-quality, high-dividend non-bank state-owned enterprises H-shares
Standard Chartered's North Asia Investment Director Zheng Zifeng stated that Trump's overall policy focus is on America First and promoting economic growth, therefore he recommends an overweight in global equities, especially U.S. stocks. U.S. small-cap stocks and regional bank stocks are seen as attractive opportunistic investments, while he remains optimistic about U.S. technology, communication services, and large bank stocks. Regarding the mainland China and Hong Kong stock markets, Zheng Zifeng pointed out that due to a policy bias towards easing, he continues to favor high-quality, high-dividend non-bank state-owned enterprise H-shares, and suggests increasing allocations during pullbacks in non-essential consumer goods, communication, and technology stocks, as these sectors are expected to benefit from potential fiscal stimulus. Compared to Hong Kong offshore stocks, he is more optimistic about onshore A-shares, which are more sensitive to domestic policies and less affected by global capital flows. He noted that as the economic growth cycle extends and cash yields decline, global equities and gold are expected to outperform cash, while the yield on U.S. 10-year Treasury bonds may fall to 4-4.25%. Developed market high-yield bonds are likely to outperform, providing attractive yield opportunities. He further indicated that major central banks are expected to continue increasing their gold reserves, coupled with U.S. debt potentially triggering safe-haven demand, leading to a 12-month target price for gold rising to $2,900 per ounce
According to the Zhitong Finance APP, Zheng Zifeng, Investment Director for Standard Chartered's North Asia region, stated that Trump's overall policy focus is on "America First" and promoting economic growth. Therefore, he recommends an overweight position in global equities, especially U.S. stocks, while U.S. small-cap stocks and regional bank stocks present attractive opportunistic investments. He continues to be optimistic about U.S. technology, communication services, and large bank stocks.
Regarding the mainland China and Hong Kong stock markets, Zheng Zifeng pointed out that due to a policy bias towards easing, he remains optimistic about high-quality, high-dividend non-bank state-owned enterprise H-shares, and suggests increasing allocations during pullbacks in non-essential consumer goods, communication, and technology stocks, as these sectors are expected to benefit from potential fiscal stimulus. Compared to offshore Hong Kong stocks, he is more optimistic about onshore A-shares, which are more sensitive to domestic policies and less affected by global capital flows.
He noted that as the economic growth cycle extends and cash yields decline, global equities and gold are expected to outperform cash, while the yield on U.S. 10-year Treasury bonds may fall to 4-4.25%. High-yield bonds in developed markets are expected to outperform, providing attractive yield opportunities.
He further stated that major central banks are likely to continue increasing their gold reserves, and U.S. debt may trigger safe-haven demand, raising the 12-month target price for gold to $2,900 per ounce