BOC International's 25-Year Outlook: It is recommended that Hong Kong stock investment revolve around the two main lines of high elasticity and high dividends

The Zhitong Finance App learned that BOC International published a report to make an outlook for 2025. As for asset allocation, equity assets are optimistic in terms of stocks. The undervaluation of Hong Kong stocks provides a high margin of safety, and the market is more sensitive to the need for improvement. It is recommended that the layout revolves around the two main lines of high elasticity and high dividends. Although US stocks are under valuation pressure, they are still attractive, supported by increased economic “soft landing” expectations and improved liquidity. The focus is on AI technology, energy, and small-cap opportunities.

Bonds: It is estimated that the 10-year yield of US bonds in 2025 is a reasonable center of between 3.5-4.0%. Short-term benefits from the Federal Reserve's interest rate cuts, but the long-term equilibrium level may rise to 4.5-5%, mainly considering the recovery in real interest rates and term premiums brought about by higher fiscal deficits.

Foreign exchange: The US Foreign Exchange Index is expected to fluctuate in the 100-105 range, showing a “first down, then up” trend. The RMB exchange rate is expected to maintain reasonable fluctuations in both directions. The marginal narrowing of the gap between China and the US and the improvement in foreign exchange settlements will help stabilize the exchange rate.

Commodities: Crude oil is neutral, and demand recovery may be limited, but it is difficult for supply to increase significantly in the short term; a stronger dollar may play against policy easing, causing gold to fluctuate in the short term, but remain bullish in the long term.

According to the report, the global economy is entering a new turning point. Monetary policy has been changed from tight to loose, laying the foundation for economic recovery; however, structural challenges such as the geographical situation and rising trade protectionism are reshaping the global economic landscape. In a game of policy easing and structural challenges, it is only by making plans and moving later that we can seize opportunities in the midst of changes and seize the opportunities brought about by economic cycle changes.

According to BOC International, the world's major central banks have entered a cycle of interest rate cuts to drive improvements in liquidity, but structural challenges such as geography may limit the momentum for recovery, and the pace of recovery among economies may further diverge. China's economic policy is expected to be further strengthened. Steady growth policies are skewed in a structural direction. The policy focus is expected to continue to revolve around expanding domestic demand, while real estate policies work both ways to accelerate stock elimination and demand activation, and the dynamic energy within the economy is expected to further unleash vitality.

The bank said that the Federal Reserve has begun a cycle of cutting interest rates, and the current policy interest rate still has a lot of room to move away from the neutral interest rate. US President-elect Trump's first-year policy proposition is expected to have limited impact on the Fed's interest rate path: 1) Based on the independence and legal protection of the Federal Reserve, policy intervention is difficult; 2) It is expected that support for US fiscal policy in 2025 may not be as strong as before, and interest rates are still in the transition stage from restrictive to neutral, and the economic growth rate is stable; 3) the policy mix advocated by Trump (immigration tightening, tariff increases, and tax cuts) The actual impact will be gradual. Taken together, Trump's policy mix in 2025 may weaken economic growth momentum and provide room for the Federal Reserve to maintain the pace of interest rate cuts.