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Inflation, rising interest rates, geopolitical tensions, supply chain disruptions, and Covid resurgences have left the Hong Kong market stagnant year-to-date. To tackle the market concerns, China has announced a series of proactive stimulus measures in the past couple of months.
As valuations remain attractive amid low investor confidence, DBS Group Research sees an opportunity for investors to play the rebound with sectors that benefit from rising interest rates and supportive policies.
Hong Kong banks
The US is entering an interest rate upcycle and we expect this to benefit HK banks, with NIM to sequentially recover from 2022 onwards.
Tech and new economy sector
We believe the uncertainties regarding the tech and new economy sector have been priced in. Comments from high-ranking Chinese officials and resumption of games approval are clear signs that the key overhangs are removed.
The market should shift its focus back to the new economy to play the likely rebound, given its attractive valuation and signs of easing from regulatory developments. The sector is also relatively shielded from rising inflation, supply chain disruption, and the China property crisis.
Want to know more on our stock research ideas?
Please visit DBS Treasures website.
Click under “Research” > “What's New” > “Equities to Watch”:
You can then select your Favorite Sectors:
