According to the CITIC Securities Research Report, the current round of upward long-term debt in developed markets is not a single inflationary shock, but rather the result of a simultaneous reevaluation of actual interest rates, term premiums, fiscal expansion, and central bank policies. Currently, changes in the US bond maturity spread structure are still generally “normalized” rather than out of control. If the Federal Reserve raises interest rates as scheduled in September, and the pressure on US inflation and long-term bond supply continues, the 10-year and 30-year US bond yields may approach 5.0% and 5.5%, respectively, and will continue to suppress highly valued assets in the short term. The medium- to long-term inflection point still depends on the rate of decline in US inflation and fiscal consolidation policies. In the two rounds of the Fed's interest rate hike cycle since 2015, capital inflows to the Hong Kong market usually gradually slow down from the four weeks before the rate hike, fall to a low point in the week of the rate hike, and then gradually recover. However, if global long-term interest rates continue to rise, the yield advantage of high dividends on Hong Kong stocks has narrowed compared to risk-free assets overseas. Cash flow stability, profit certainty, and dividend sustainability should be further examined in terms of allocation, and attention should be paid to the segment direction where southbound holdings are relatively high and marginal pricing power for foreign capital is relatively low. It is recommended that priority be given to banks, coal, property management, and gas.

According to the CITIC Securities Research Report, the current round of upward long-term debt in developed markets is not a single inflationary shock, but rather the result of a simultaneous reevaluation of actual interest rates, term premiums, fiscal expansion, and central bank policies. Currently, changes in the US bond maturity spread structure are still generally “normalized” rather than out of control. If the Federal Reserve raises interest rates as scheduled in September, and the pressure on US inflation and long-term bond supply continues, the 10-year and 30-year US bond yields may approach 5.0% and 5.5%, respectively, and will continue to suppress highly valued assets in the short term. The medium- to long-term inflection point still depends on the rate of decline in US inflation and fiscal consolidation policies. In the two rounds of the Fed's interest rate hike cycle since 2015, capital inflows to the Hong Kong market usually gradually slow down from the four weeks before the rate hike, fall to a low point in the week of the rate hike, and then gradually recover. However, if global long-term interest rates continue to rise, the yield advantage of high dividends on Hong Kong stocks has narrowed compared to risk-free assets overseas. Cash flow stability, profit certainty, and dividend sustainability should be further examined in terms of allocation, and attention should be paid to the segment direction where southbound holdings are relatively high and marginal pricing power for foreign capital is relatively low. It is recommended that priority be given to banks, coal, property management, and gas.