CICC International: Fed rate cut is favorable for emerging markets; dividend-paying stocks are the focus of Hong Kong stocks.

The United States is entering a period of interest rate cuts, and investors believe that bonds can be deployed for investment. Zhang Haoen, the investment director of personal and commercial banking at Shinhan International, stated that the bank's high net worth clients have been looking for high-grade bonds with slightly lower prices than face value and longer maturities, including even U.S. Treasury bonds. For investors looking to build a balanced portfolio, a ratio of 35% stocks, 60% bonds, and 5% gold assets can be considered. Zhang Haoen stated that the outlook for European and American bonds and investment-grade bonds is positive. After the Federal Reserve establishes rate cuts, it can reassess U.S. Treasury bonds, but attention should be paid to whether the policies of the next U.S. president will change market inflation expectations. It is recommended to slightly increase the maturity of U.S. Treasury bonds from the previous recommendation of 4 to 5 years to between 5 and 7 years. Rate cuts are favorable for emerging markets, including Asia, and the outlook for Asian investment-grade bonds is positive. European and American stock holdings can include the healthcare sector Regarding stocks, Zhang Haoen mentioned that investors willing to take risks and withstand market volatility can choose high dividend stocks. Europe reduced interest rates for the second time last week, with the reduction in marginal lending rates greater than the benchmark rate, indicating that Europe will continue to cut rates, which will benefit asset markets. Financial stocks (insurance, asset management), healthcare, energy, and other stable dividend-paying stocks are recommended. As for U.S. stocks, with the Federal Reserve meeting soon and the U.S. presidential election in November, there may be adjustments in the U.S. stock market. Defensive sector stocks can be included in asset allocation, such as healthcare. For Hong Kong stocks, Zhang Haoen believes that dividend-paying stocks, including domestic banks, domestic insurers, Chinese telecom, and energy stocks, are the focus. In the technology sector, some large cap stocks, mobile gaming, and consumer platform stocks may not pay dividends, but with rate cuts in Europe and the U.S., funds will flow into Asia, such as Japan, Taiwan, and Korea. As long as funds continue to stay in Asia, there is a chance to pay attention to undervalued Hong Kong stocks that could benefit from these large cap technology stocks. Hong Kong stocks recommended for utilities and Chinese telecom stocks EB SECURITIES international securities strategist Wu Lixin stated that Hong Kong's utilities, Chinese telecom, and gold mining stocks are sectors that may benefit from future rate cuts. These first two sectors, under the backdrop of U.S. rate cuts, have greater potential for attractive returns compared to U.S. bonds. For investors looking for long-term income, China Mobile Limited (00941) and CLP HOLDINGS (00002) can be considered; for investors seeking both income and stock price performance, they can consider China Telecom Corporation (00728). In terms of bonds, Wu Lixin believes that international bank bonds, Asian investment-grade bonds, and U.S. Treasury bonds should be considered. As the market expects a total of 2.5% rate cuts in the coming two years, the trend of bond prices rising in the future is viewed positively. In terms of commodities, he believes that gold prices still have the opportunity to continue to reach new highs by the end of the year, and he recommends a neutral investment portfolio with a ratio of 40% stocks, 40% bonds, and 20% commodities.