CITIC Construction Investment: Focus on Hong Kong stock opportunities leveraged by a weak dollar in 2027

The Zhitong Finance App learned that CITIC Construction Investment Securities released a research report stating that it is keeping an eye on the liquidity of global stock markets; relatively speaking, it is paying more attention to Hong Kong stock opportunities driven by weak US dollars in 2027. The main pricing logic of the global stock market over the past five years is AI industry chain opportunities. US stocks, Korean stocks, Japanese stocks, and the Chinese stock market generally continue this logic. The trend of the AI industry is an important reason. The global dollar tide is pouring into technology, and supporting technology stocks is also a very important reason. In comparison, Hong Kong stocks have generally been under pressure over the past few years due to reasons such as technology, strong dollars, takeout wars, southbound capital withdrawal, and corporate listings. If the global dollar trend goes against the tide and technology pricing is suspended, then we can look forward to the opportunities that Hong Kong stocks will present after the dollar weakens.

Oil and gas pricing opportunities broke through market imagination over and over again in 2026. Because of the ongoing suspension of service in the Strait of Hormuz caused by the US-Iran conflict, and the resulting huge shortage of global oil and gas supply, the market was unanticipated.

CITIC Construction Investment admits that it will be difficult for the oil and gas price center to return to the level before the US-Iran conflict for some time, but the sharp rise in oil and gas prices will hardly surpass 2026. After all, the “dust has settled” in the US midterm elections. Anti-war and anti-inflation are the current consensus in US internal affairs, and the world is also thinking about the asset risk and consumption of people's livelihood and welfare caused by the US-Iran war.

The upward trend in oil and gas will reassess inflation in 2027, and this progress has not yet come to an end. This is why we should focus on pricing opportunities for agricultural products in 2027. Agricultural products are a typical relay asset after the rise in oil and gas prices. Not to mention that in 2026 and 2027, the world will still experience agricultural product price fluctuations caused by strong El Niño, so in the first quarter of 2027 and beyond, the market can maintain a round of agricultural product opportunities. This may also be a time when the dollar is trending against the tide.

After the US dollar reverses the tide, and in the face of the gap after the outflow of capital from Africa to the US, the Federal Reserve will passively take on the role of accepting the fall in US assets. At that time, the US will need to use the weakening US dollar in exchange for stable prices of US assets such as stocks and bonds, and a weak dollar will become an important asset pricing logic in 2027.

Bonds: Interest rates on Chinese bonds may bottom out in 2027, and interest rates on Western bonds may peak, but from a central point of view, interest rates on Chinese bonds will still be lower than overseas.

First of all, it should be emphasized that CITIC Construction Investment does not believe that Euro-Japanese bonds have reached the highest interest rate in 2026; on the contrary, the bank is concerned about the risk of a bear market in Western economies such as the US, Europe, and Japan in 2027.

The impact of oil and gas on inflation is not the absolute price level, but rather the maintenance time of the central core. An increase in energy prices is determined in 2026, then the world will experience a wave of inflation in 2027. Meanwhile, in the process of retransmission of inflation, Western currencies are easy to tighten and difficult to loosen, and interest rates on bonds in Western economies such as Europe, Japan, and the US may reach a higher point.

The essence of the bear market on Western economies' bonds is that the welfare economy reverses, so a fall in interest rates on Western economic bonds requires exchange rate depreciation at the cost of depreciation.

When AI financing is affected by market pricing risk premiums, the dollar tide is reversed. At this time, the Federal Reserve begins to buy debt in order to rebalance the pressure on US assets (including US debt). At that time, it may be the trigger point for the highest interest rate on Western bonds. In other words, we may see Western bonds end the one-sided upward trend of the past five years at some point next year.

If there are still pessimistic expectations about Chinese real estate, then the probability that interest rates on Chinese bonds will bottom out may be underestimated by the market.

Instead, CITIC Construction Investment believes that the conditions for stabilizing the real estate chain in 2027 are becoming more mature. After China Real Estate completes the “shift”, even if the 8.28 policy disrupts new housing sales and land concession funds, real estate volume and price will eventually be sparked in 2027. This also means that China's rapid downsizing phase has come to an end, and interest rates on Chinese bonds have also bottomed out.

Exchange rate: The most volatile currency in 2027 is probably the US dollar. A weak dollar is possible; the RMB exchange rate is generally strong.

The US dollar index has remained above 95 for the past five years, and has been above 100 or even 110 for most of the time. This is due to two things

One reason is that AI empowers the resilience of the US economy and keeps the US capital market absolutely attractive. Another reason is the decline in the competitiveness of European and Japanese economies, and the weakening of the euro and yen. Corresponding to the asset side, the low interest rates and safe-haven attributes of European and Japanese bonds have been reduced by most during the supply-driven cycle.

Therefore, over the past five years, the global dollar trend has continued to flow from economies such as Europe and Japan to the US in an almost “paranoid” attitude. This has led to relatively extreme pricing of US stocks and US assets. In the end, CITIC Construction Investment ushered in a rare weak yen, a weak euro, and a strong dollar. Once the strong attractiveness of US assets declines, then in 2027, the market will usher in a reverse trend of the US dollar. This backflow will eventually be marked by the weakening of the US dollar.

Referring to historical experience, when America's traditional growth is weak and technological advantages are temporarily reduced, the US dollar index can even fall below 80. Of course, CITIC Construction Investment believes that the current gap between the US and the European and Japanese economies continues to widen. What lies in the middle is a revolution in resources and technology, so CITIC Construction Investment may not be able to see the US dollar index below 80 for the time being.

Refer to 2025, when the market questioned the US technology monopoly because DeepSeek questioned the US technology monopoly, explaining that the US dollar index once hovered above 90. This taught CITIC Construction Investment that when the credit premium for AI financing surfaced, the US dollar index could be weaker than 2025. It may fall 90, but it is still above 80.

The RMB exchange rate has remained strong due to three major factors. One is strong manufacturing competitiveness, one is technological advantage that breaks America's monopoly, and the other is domestic demand for real estate that has bottomed out. Perhaps in 2027, CITIC Construction Investment will witness an interesting phenomenon. The RMB initially showed the characteristic “safe-haven nature” of international currencies.