Technology, new energy and banking sectors are poised to outperform the broad equity market in Hong Kong this year, according to a survey.
The survey, conducted by the Hong Kong Securities Association (HKSA) among its 1,300 members in November last year, showed that a third of the respondents are upbeat about the technology sector, 27 percent favor new energy while 16 percent place their bets on banking plays.
More than 60 percent of the respondents consider the equity market as the best asset class to invest in, while more than half think the China market holds the most potential.
“Despite the economic slowdown, China’s growth is better than in many other markets,” said Jeffery Chan, the association’s chairman.
Meanwhile, HKSA director Ben Kwong played down interest rate concerns, noting that the US Federal Reserve will only raise borrowing costs at a gradual pace while plunging oil prices put pressure on inflation around the world.
“The interest rate will not go up so quickly,” he said. “And low interest rate with high liquidity naturally means the best investment option is the stock market.”
Kwong expects the benchmark Hang Seng Index to reach 26,000 this year, and he encourages investors to bet on individual stocks rather than the broad market.
According to the HKSA survey, 65 percent of the respondents think the Shanghai-Hong Kong Stock Connect is beneficial to both the Hong Kong and mainland stock markets, despite the low daily trading volumes since its launch in November.
About a third of the respondents said the cross-border stock trading scheme has pushed up operational costs because of the need to comply with more regulatory requirements.
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