The just-concluded ** Economic Work Conference systematically deployed the economic work in 2024. On December 13, Kuang Zheng, chief investment officer of HSBC Global Private Banking and Wealth Management China, said that HSBC expects that the counter-cyclical policy is expected to be moderately strengthened in the future, and will strengthen policy coordination and work in the same direction, and it is expected that more demand-side and supply-side real estate support policies will be needed in the future to resolve the current real estate credit risk and boost market confidenceIt is expected that the positive policy initiatives will continue into 2024, and the policy environment will be more proactive and robust.
In 2024, opportunities and challenges coexist.
In 2024, we believe that China's best opportunities and challenges coexist. Kuang Zheng pointed out that the uncertainty of the "global ** year" and exports, the high willingness of social savings, and the digestion of excess capacity caused by historical reasons in some industries will likely constrain market performance. However, increasingly strong hedging on the policy front and warming U.S.-China relations have helped to revise expectations.
With the accumulation of positive policy signals, the trading volume of the A** market has risen recently, and investor sentiment has shown signs of recovery. "We maintain a neutral view on A-shares, with a preference for sectors with structural strengths. Investors can take advantage of the current low valuation to focus on sectors with structural advantages, such as the semiconductor and computer industry chain in independent innovation, the smart car industry chain in the green energy transition, and the resilient consumer segment. Kuang Zheng said.
The central bank is expected to cut interest rates by 20 basis points in the second half of next year.
In the bond market, the market capital pressure is still relatively high in the short term. Liquidity has fluctuated due to factors such as the addition of 1 trillion yuan of government bonds and pre-approved local government bonds, and the yield curve has flattened. Kuang Zheng believes that the central bank has the need to tighten the hedging capital side, and expects the central bank to cut the reserve requirement ratio within the year.
He pointed out that although the current bond market is affected by the capital side, looking forward to 2024, the yield of US Treasury bonds may have room to fall. On the one hand, the U.S. market interest rate has been rising rapidly for several months and may be overshootingOn the other hand, the recent U.S. inflation data cooled more than expected, which is expected to support the downward movement of interest rates. The U.S. policy rate is expected to enter a downward channel in the second half of the year. The exchange rate pressure will usher in a phased easing of the bond market disturbance, so the room for monetary policy release will be more relaxed.
We expect the central bank to cut interest rates by 20 basis points in the second half of next year, and Treasury rates are likely to remain unchanged in the first half of the year and have a chance to moderate downside in the second half of the year. Kuang Zheng said.
The property policy is expected to continue into 2024.
Recently, the People's Bank of China and other departments jointly held a symposium on financial institutions to further promote the stability of key financing channels such as credit, bonds, and equity in the real estate industry.
Kuang Zheng believes that these measures are expected to play a further supporting role in alleviating the financial pressure of large developers. At the same time, measures to stabilize the demand side of real estate are also being promoted, including the reduction of the down payment ratio of second home loans in Shenzhen, and the launch of the first urban village reconstruction legislation in Guangzhou. In his view, policy support for real estate has accelerated, echoing the more expansionary fiscal policy that has already emerged.
He pointed out that compared with the resilience of consumption, the stability of infrastructure investment and the weak recovery of the manufacturing industry, the pace of recovery of the real estate chain this year will lag significantly, which will also be one of the important variables of economic growth in 2024. The current weak real estate sales are not due to the disappearance of rigid demand, but the expectation that real estate financial risks are transmitted to residents, suppressing the demand for home purchases. However, the financial liquidity problem of developers has affected the construction period, making the transmission chain of real estate to the economy longer.
We believe that the current direction of real estate policy has grasped the key points, and the time of effect will affect the pace of growth next year. Kuang Zheng said.
Text: Beijing Youth Daily reporter Cheng Jie.
Edited by Fan Hongwei.