Galaxy Securities: Hong Kong Stock Investment Strategy Should Focus on Three Main Lines Under Geopolitical Conflicts and High Oil Prices

Question: How will the long-term conflict between the US and Iran impact the Hong Kong stock market in stages?

According to a research report from China Galaxy Securities, looking ahead, if a prolonged quagmire conflict occurs between the US and Iran, the Hong Kong stock market will undergo a three-stage evolution: “short-term emotional shock → medium-term fundamentals transmission → long-term structural differentiation.” Macroeconomically, the market faces a severe combination of “low growth, high interest rates, and sticky inflation,” but the valuation advantage, high dividend characteristics, and support from southbound funds give Hong Kong stocks relative resilience among non-US assets.

Investment strategies should focus on three main lines: (1) Cyclical sectors. The global manufacturing recovery combined with AI capital expenditure expansion is causing a systemic reshaping of supply and demand in cyclical sectors. In terms of strategic resources, attention is recommended for traditional energy sources such as crude oil, natural gas, and coal, as well as precious metals like gold, and key metals related to military and hard technology. Additionally, chemical products with cost transmission capabilities and agriculture with improving prosperity are worth close monitoring. (2) Financial sectors and consumer discretionary sectors at valuation bottoms. (3) Technology sectors (with independent controllable logic in hard technology). Currently, global funds show a significant preference for upstream hardware, and the trend of “de-softening” to “hardening” in HALO trading is expected to continue into the first half of the year.

Daily Economic News