Standard Chartered: The Hang Seng Index is expected to reach 28,000-30,000 points next year, and the Federal Reserve will cut interest rates 3 times next year

The Zhitong Finance App learned that Zheng Zifeng, investment director of Standard Chartered North Asia, said that after the consolidation of the Chinese stock market, valuation attractiveness increased, and profit growth is expected to rebound from a low base in 2025. The bank maintains an overbalance of Chinese stocks, and the Hang Seng Index predicts a 12-month basic range of 28,000-30,000 points. If investment sentiment worsens, the Fed's interest rate reduction expectations or independence declines, or policy support is insufficient, the Hang Seng Index range may move down to 26,000-28,000 points.

Zheng Zifeng pointed out that up to now, tariffs have had limited impact on commodity inflation. As employment weakens, the Federal Reserve may cut interest rates by another 75 basis points before the end of 2026.

He said that it is predicted that the Federal Reserve will cut interest rates three times next year under the basic circumstances, and believes that the Bank of Hong Kong will be able to follow the interest rate cuts. The debt pressure on Hong Kong real estate stocks will cool down, and the bank will allocate a neutral allocation.

Zheng Zifeng also pointed out that the market's doubts about whether asset valuations or artificial intelligence capital expenditure will form a bubble next year may intensify. The fluctuations caused by these concerns are more worthy of attention than the bubble debate. The Federal Reserve is likely to cut interest rates further in the coming year. The macroeconomic outlook is good, which is beneficial to risky assets, but diversification is essential (it is recommended to overallocate gold and global stocks), and it is also necessary to diversify regional allocations. In terms of stocks, Europe (excluding the United Kingdom) and Japan are reduced to low allocations, while raising India to overallocation.

Chen Zhengyi, head of investment strategy at Standard Chartered Hong Kong, said that the bank has overtaken global stocks; profits in the US technology industry are growing strongly. Interest rate cuts support the economy, and a weak dollar is beneficial to risky assets. Overtaking US stocks, but the risk of overvaluation cannot be ignored.

At the same time, the bank overallocated emerging bonds. The yield on US 10-year treasury bonds may fall back to 3.75% to 4% in the next 12 months, and emerging market bonds are expected to outperform developed markets.

Chen Zhengyi pointed out that gold is challenging new highs. The central bank and investors continue to look for alternatives to the US dollar. There is still room for growth in diversified reserve demand. Spot gold may challenge 4,800 US dollars next year.