The views of renowned economist Hong Hao have always attracted attention. Recently, he expressed his opinions as a partner and investment director at Lianhua Asset Management, with many of his views being noticeably more optimistic than those of other commentators.
He believes that this round of the Hong Kong stock market is different from the previous one and will not &#34;peak&#34; at the current position. Global liquidity is improving, and there is no doubt that both the Hong Kong and U.S. stock markets will reach new highs.
One supporting viewpoint for the market is the direction of policies. Hong Hao bluntly stated that the policy trends revealed at recent important meetings will help boost market sentiment, and additionally, liquidity in China is improving.
Hong Hao also pointed out that global liquidity is improving as well, and many large global companies are exceeding expectations in their mid-term earnings, so investors should not be overly conservative.
Regarding the recent &#34;war&#34; in the food delivery market among internet platforms, Hong Hao believes this is a helpless move by internet companies. In the future, under the new environment of computing power, they will refocus on AI.
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Key Quotes:
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&#34;Everyone shouldn't doubt that this time will be like the last just because we previously peaked and fell around this index level; this time is different, we have a large amount of liquidity.&#34;
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&#34;Not only are the liquidity conditions in China improving, but actually global liquidity is also improving, so at this time, everyone should not be too conservative.&#34;
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&#34;Foreign capital has actually been participating in investments in Chinese stocks all along. However, foreign participation is short-term. It doesn't matter if foreign capital hasn't made money in Chinese stocks; it leaves more chips for us.&#34;
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&#34;This year, companies in essential consumer goods have performed very well, such as some bubble tea stocks and gold retail stocks. Some people may be buying gold as a form of savings.&#34;
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&#34;The consumption data in the first half of the year has begun to show results under the stimulus policies, and we should continue to pursue this. However, recent policies tend to help consumption structurally.&#34;
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&#34;If everyone is just waiting for a pullback, waiting for an opportunity to buy on a pullback, then actually the pullback will be very difficult; even if there is a pullback, it will be shallow.&#34;
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<h2>This Market Will Not Easily Peak</h2>
Recently, the Hong Kong stock market has broken upward again, but the Hong Kong stock index has also reached previous high levels, leading to some concerns in the market about whether the Hong Kong stock market will enter another &#34;high-level consolidation (oscillation)&#34; phase, needing some important meetings or significant policies to break the deadlock.
Hong Hao believes that there is no need to worry this time; there is still a lot of upward space for the Hong Kong stock market. People should not doubt that this time will repeat the last peak story just because the index adjusted after firmly reaching this position last time.
&#34;This time is different; this time we have a large amount of liquidity,&#34; said Hong Hao.
Hong Hao also believes that some important meetings that have recently been held discussed many topics, such as anti-involution, regulation of excess capacity, and some new consumption stimulus policies, etc. All of these will help boost investment sentiment in the market.
Moreover, the most important point is, &#34;Not only are the liquidity conditions in China improving, but actually global liquidity is also improving, so at this time, everyone should not be too conservative.&#34;
<h2>It's Good That Foreign Capital Doesn't Participate, Leaving More Chips for Us</h2>
Recently, foreign banks have upgraded their ratings on the stock markets of China and South Korea, with some Chinese stocks being rated as &#34;overweight.&#34; However, some surveys of overseas fund managers show that certain overseas fund managers have reduced their allocation to Chinese stocks. How should we view this contradiction?
Hong Hao responded that even without rating upgrades, foreign capital has actually been participating in investments in Hong Kong stocks. However, the Chinese stocks that foreign capital (mostly) participates in are short-term.
Due to &#34;compliance reasons,&#34; overseas hedge funds and long-only funds find it difficult to significantly increase their positions in Chinese stocks. Especially in the current market, technology companies or innovative pharmaceutical companies have performed exceptionally well this year.
&#34;These top-performing technology and innovative pharmaceutical companies could be included in the foreign capital's restricted trading list at any moment. So it's not surprising that foreign capital is (cautiously) not participating.&#34;
Hong Hao also stated, &#34;It's actually fine that foreign capital hasn't made money from Chinese stocks. It's good to leave more chips for ourselves.&#34;
<h2>No Doubt About Long-Term New Highs</h2>
Regarding the topic of how high the Hong Kong stock index can rise in the long term?
Hong Hao indicated that there is no doubt that the Hong Kong stock market will break through and set a new historical high in the future, reaching new highs is absolutely not in doubt.
Currently, the reason the index is stagnating at this level is mainly because some funds may be considering &#34;taking profits&#34; at this position.
Of course, from the overall liquidity environment and market sentiment, the position of this stock index (has little resistance), at most there is only slight resistance. But there is still upward space for the stock index.
<h2>Some Economic Data Exceeds Expectations</h2>
At the same time, regarding what kind of supportive policies may emerge in the future and their impact on the stock market.
Hong Hao stated that everyone is observing. Recently, some economic data has exceeded expectations. However, the more concerning real estate data is relatively average. To be honest, there was a rebound in real estate in the first three months of this year, but it seems to have (fallen into a stalemate) now. Additionally, the peak of the first round of national consumption stimulus has passed. In this context, looking ahead to the third and fourth quarters, there is a trend of economic slowdown.
From a policy perspective, the market will expect whether policies should be proactively introduced to launch some targeted measures. Coincidentally, important meetings in July or August usually set the tone for the economy and policies for the second half of the year. Last year's significant stimulus policy (9.24) was also launched at the end of September, and the rhythm may still be similar in the second half of this year.
<h2>Policy Drives Improvement in Consumption Data</h2>
Speaking of expectations, this year, driven by subsidy policies, we can see that consumption data is relatively good. In this year's market, essential consumer goods have performed quite well.
For example, some bubble tea stocks and gold retail stocks have been relatively strong. Some people buy gold as a form of savings. Some innovative pharmaceuticals (have also performed) very well.
In the first half of the year, consumption data showed initial effectiveness under the stimulus policies, and this should continue. However, we have seen that recent policies tend to help consumption structurally. For instance, the previously announced subsidies for newborns
This also responds to the long-standing calls from the academic community for economists, suggesting that policies can do more, such as: helping with childbirth, assisting with retirement, medical insurance, raising the minimum wage, etc. Perhaps more favorable policies may be implemented in the future.
<h2>Internet Giants May Refocus on Core Business</h2>
The battle for takeout among internet giants has stimulated consumption on one hand, but also raised concerns about excessive competition affecting company performance. Both viewpoints and statements are very prevalent.
Hong Hao believes that the actions of large internet platforms are actually a last resort. From the perspective of companies within the industry, no one wants to see profits decline. Although from a consumer standpoint, being able to buy a cup of milk tea for one or one and a half yuan is delightful, the investment from internet companies is substantial. It is said that Alibaba plans to invest 50 billion, and JD.com claims to invest several hundred billion, all of which is forced.
The strengthening of traditional businesses by internet companies may be related to the lack of breakthroughs in AI technology. Due to the absence of significant technological advancements, these large internet companies, having reached the limits of their computing power (or being restricted externally), can only seek other avenues to develop their businesses. This is the only explanation; otherwise, why would they engage in a business that doesn't make money?
However, just a few days ago, NVIDIA was able to sell H20 chips to China again. In this context, it suddenly became apparent that the stock prices of some internet companies rose significantly. This indicates that in this new environment, with the availability of new chips, these platforms can refocus on AI rather than competing fiercely over a few cents.
<h2>Don't Be Too Conservative</h2>
Regarding investments in overseas markets and U.S. stocks, Hong Hao also has some interpretations.
He believes that if you look at technology, positions, and sentiment, the U.S. stock market needs an adjustment. However, a significant portion of people and institutions may not have heavy positions, meaning that (considering the funds looking for adjustments) they are not positioned. Therefore, the U.S. stock market may also choose to rise, and institutions with no positions will inevitably feel anxious.
So now everyone is waiting for a pullback; if there is a pullback, we will buy. If everyone has this mindset of waiting, then a pullback becomes very difficult, and even if it occurs, it will be shallow.
Hong Hao also mentioned that as early as May this year, he judged that the worst-case scenario regarding tariffs had already passed. He even believes that the Hang Seng Index will reach new highs this year.
Currently, the market believes that tariffs will not be as bad as previously anticipated. For example, the current tariff rate is 15%. The advantages of Chinese manufacturing are hard to disappear due to this level of cost increase.
Therefore, as long as there are no particularly significant &#34;bad news,&#34; the market will continue to improve valuations in line with the improvement in liquidity.
Of course, there will also be some short-term disturbances. For instance, the White House has mentioned firing Powell again, which is quite foolish. If he does that, it would be even more foolish. If he is not that foolish, considering that the earnings reported by large companies are all exceeding expectations, and funds are extremely abundant, one should not be too conservative.
Risk Warning and Disclaimer
The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances
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Renowned economist Hong Hao believes that the current Hong Kong stock market is different from the past and will not easily reach a peak. The improvement in global liquidity will drive the Hong Kong and U.S. stock markets to new highs. He pointed out that recent policy trends will help market sentiment, and investors should not be overly conservative. In addition, foreign capital continues to participate in Chinese stock investments, and consumer goods companies are performing well, with initial effects of consumption data emerging under policy stimulus. Hong Hao advises investors to seize opportunities and not wait for a pullback

- Renowned economist Hong Hao expresses an optimistic view on the Hong Kong stock market, suggesting it will not peak at current levels due to improving global liquidity.  
- He emphasizes that recent policy directions and significant meetings will positively influence market sentiment, urging investors not to be overly conservative.  
- Hong also notes that while foreign investment remains short-term, the long-term outlook for the Hong Kong index is promising, with potential for new highs driven by favorable economic data and consumption policies.

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Hong Hao's latest prediction: This market will not easily reach its peak, Hong Kong stocks will set new long-term highs, and global liquidity is improving, so we should not be too conservative