Bank of America Securities: "Government Work Report" deepens reforms, but did not announce major stimulus measures. In the long run, this could strengthen the advantages of traditional industries.

Bank of America Securities released a research report stating that Hong Kong Chief Executive John Lee Ka-chiu recently published his fourth policy address. As expected by the market, the address did not announce any major stimulus measures, but instead focused on accelerating reforms and enhancing Hong Kong's economic competitiveness to address the weak economic growth in the years following the pandemic. The report also noted that there were no significant stimulus measures for the real estate market and no measures to alleviate the pressure on the commercial real estate industry. In particular, there was no further reduction in stamp duty rates, nor was there any announcement of a potential housing subsidy plan (allowing mainland Chinese talents to use domestic funds in Hong Kong to purchase properties in a closed-loop manner). Compared to the moderate market expectations, Bank of America believes that the lack of real estate stimulus measures and countercyclical growth measures are not surprising. Considering the worsening fiscal situation and the expected easing cycle of the Federal Reserve, the bank believes that the government is not in a rush to inject additional funds to stimulate short-term growth. Bank of America stated that in the long term, the government's continuation of the reform commitments made in the past few years is still encouraging. It believes that consolidating the advantages of traditional industries and developing emerging industries in a prudent and pragmatic manner are key to enhancing Hong Kong's long-term competitiveness.