Standard Chartered Bank: expects the Hang Seng Index to reach 28000-30000 points next year. In a basic scenario, the Federal Reserve is expected to cut interest rates three times next year.

Stanley North Asia Investment Director Zheng Zifeng said that after the consolidation of the Chinese stock market, the attractiveness of valuation has increased, and profit growth is expected to rebound from the low base in 2025. The bank maintains an overweight position in Chinese stocks, with a basic range forecast for the Hang Seng Index of 28,000-30,000 points over the next 12 months. If investment sentiment deteriorates, expectations of rate cuts by the Federal Reserve or a decrease in independence, or insufficient policy support, the range of the Hang Seng Index may move downwards to 26,000-28,000 points. Zheng Zifeng stated that so far, the impact of tariffs on commodity inflation has been limited, and with weakening employment, the Federal Reserve may cut interest rates by another 75 basis points by the end of 2026. He also mentioned that it is predicted that under the Federal Reserve's basic scenario next year, interest rates will be cut three times, and he believes that Hong Kong banks have the ability to follow suit. The debt pressure on Hong Kong real estate stocks will ease, so the bank recommends a neutral allocation in this area. Zheng Zifeng also pointed out that market concerns next year about whether asset valuations or artificial intelligence capital expenditures are forming a bubble may intensify. The volatility caused by these concerns is more worthy of attention than the debate about bubbles. The Federal Reserve may further cut interest rates over the next year, the macroeconomic prospects are good, which is favorable for risk assets, but diversification is crucial (recommend overweighting gold and global stocks), as well as the need for regional diversification. In terms of stocks, Europe (excluding the UK) and Japan will be downgraded to underweight, while India will be upgraded to overweight. Stanley Hong Kong Investment Strategy Manager Chen Zhengtuo stated that the bank is overweighting global stocks. Strong profit growth in the US technology sector, economic support from rate cuts, and a weak US dollar are favorable for risk assets. The bank is overweight in US stocks but cannot ignore the risk of overvaluation. At the same time, the bank is overweighting emerging market bonds. The yield on the US 10-year Treasury bond may fall to 3.75% to 4% in the next 12 months, and emerging market bonds are expected to outperform developed markets. Chen Zhengtuo stated that gold is challenging new highs, with central banks and investors continuing to search for alternatives to the US dollar, and there is still room for growth in diversifying reserves. The spot gold may challenge $4800 next year.