From August 27-28, Huatai Securities held its 2025 Autumn Investment Summit in Shanghai. This summit was themed "Looking Ahead and Breaking New Ground," exploring global macroeconomic and market outlook for the second half of 2025.
The two-day conference consisted of a main forum and 10 industry sub-forums, focusing on growth opportunities in digital assets, Hong Kong market allocation, AI+, New Consumer 3.0, innovative drug overseas expansion, and other emerging sectors.
Experts including Sun Xuegong, Director of Decision Consulting Department at China Center for International Economic Exchanges, Guo Kai, Executive Dean of China Finance 40 Forum Research Institute, and Zhao Hai, Director of International Politics Research Department at the National Institute for Global Strategy, Chinese Academy of Social Sciences, delivered keynote speeches on topics including the 15th Five-Year Plan outlook, structural changes in global trade and financial systems, and current international dynamics.
Liang Hong, Chairman of Huatai Securities' Institutional Business Committee, remarked in her opening address that over the past six months, China-US competition has experienced multiple rounds of intense confrontation and has entered a relatively stable stage of strategic stalemate. Global asset allocation is gradually forming more diversified and decentralized trends. Domestically, a series of pragmatic policies have driven economic stabilization and market confidence recovery. DeepSeek has triggered global reassessment of China's technological innovation potential, which is gradually playing out in equity, bond, and currency asset prices. The Fourth Plenary Session of the 20th CPC Central Committee to be held in October and the forthcoming "15th Five-Year Plan" proposal will serve as important policy windows for observing China's next five years. China is committed to transforming its economic growth model toward domestic demand driven by consumption, with the key to successful transformation lying in continuously promoting deep structural reforms.
Huatai Research's macro team conducted a roundtable discussion on current macroeconomic and market concerns.
Will domestic economic policy continue its proactive and accommodative stance in the fourth quarter of this year, and how should global economic growth momentum be assessed? Yi Chan, Chief Macroeconomist at Huatai Securities, believes that this year, the richness of domestic proactive fiscal policy has exceeded expectations, with significantly improved liquidity for residents, government, and markets. He expects subsequent fiscal policy to maintain diversity in a "subtle and gradual" manner. In the opening year of the 15th Five-Year Plan, the policy stance of stabilizing growth is expected to continue. Internationally, the impact of US tariffs on global economic growth remains manageable, with US dollar weakness providing significant cushioning for global growth momentum. The US may maintain a monetary easing trend, combined with overseas fiscal policy trending toward accommodation, suggesting global growth will maintain certain resilience in the second half.
Yi Chan also mentioned that since 1970, the US dollar has undergone five adjustments. Current investors should be wary of declining confidence in the US dollar's fiat currency credibility and adopt a more open attitude in asset allocation, more actively allocating scarce assets, including equity assets.
What are the core contradictions and themes that the market will focus on in the next quarter? Can the trend of stocks outperforming bonds continue? Zhang Jiqiang, Director of Huatai Securities Research Institute and Chief Fixed Income Analyst, stated that in the fourth quarter of this year, domestic liquidity remains relatively clear. After the market experiences valuation and sentiment repair, attention will shift to whether performance can follow through. Additionally, the "15th Five-Year Plan" layout, China-US leadership meetings, anti-involution policy advancement, and Federal Reserve rate cuts are all topics worth monitoring.
Zhang Jiqiang pointed out that the current stock-bond cost-performance ratio has somewhat converged. With performance yet to be verified, the bond market faces limited impact. If the stock market continues its volatile upward trend, sector opportunities will be key to determining success or failure. If the upward slope steepens, preparation should be made for potential medium-term reversals. Overall, the value reassessment of Chinese assets is still evolving, and he maintains confidence in the long-term revaluation trend of Chinese assets.
From a quantitative model perspective, what is the overall view on current asset allocation? Market concerns about US stocks began last year - how should we judge the specific timing of US stocks entering a downward trend? Lin Xiaoming, Chief Financial Engineer at Huatai Securities Research Institute, believes current asset allocation should focus on cycle positioning and risk mitigation. After two years of gains, US stocks are at the peak of this cycle and entered a downward trend in the second half of this year. Trend reversal may involve volatile fluctuations, with greater risks for US stocks in the first half of next year, suggesting investors should be cautious. As the US economic cycle enters decline, US bonds present allocation opportunities. Domestically, this round of A-share cycles lags behind overseas markets and is currently in an upward cycle with relatively optimistic prospects.
In commodity markets, gold's major cycle uptrend has paused, with investors advised to primarily observe, though it still retains certain hedging value. Regarding exchange rates, with US stocks and commodities at cyclical highs, the US dollar has reached a cyclical bottom. Copper is currently at high levels; if the global economy enters a downward cycle, copper prices may turn downward. Black commodities and crude oil are currently at relatively low positions, mainly range-bound.
Can this round of A-share performance continue? From a quarterly perspective, how should industry allocation be conducted? From a longer-term view, which sectors deserve left-side positioning? He Kang, Chief Strategist and Co-Chief Financial Engineer at Huatai Securities Research Institute, believes this round of performance falls between the 2006-07 fundamental-driven and 2014-15 liquidity-driven markets. Current liquidity is relatively abundant, with fundamentals still in a bottoming process. He expects the ROE inflection point to appear in the fourth quarter and maintains optimism about the market transitioning from confidence building, ecosystem optimization, and liquidity-driven to fundamental-driven.
Regarding industry allocation, He Kang suggests grasping main themes while noting that the market has shown some overbought signs, recommending reserving some positions for potential future volatility. He particularly mentioned left-side positioning opportunities in consumer sectors. While the mainstream market view on consumption is short-term low-level catch-up, it contains longer-term logic including business cycle bottoming, high dividends, and foreign capital return.
Recently, Hong Kong stocks have seen slower gains relative to A-shares, and AH premiums have reached lower levels. How should we understand future Hong Kong stock relative opportunities and potential? From an institutional portfolio allocation perspective, why should Hong Kong market importance increase? Li Yujie, Strategy Analyst at Huatai Securities Research Institute, believes that with institutions now deeply participating in Hong Kong stock investment, AH selection can no longer be limited to discussing broad-based index gains but should be refined to industries and individual stocks. Hong Kong stocks' advantage sectors relative to A-shares include internet and software, new consumption and innovative drugs, as well as Hong Kong local stocks under dual monetary and trade condition easing, all in a process of improving business trends.
Looking forward, US dollar liquidity is trending more toward accommodation, Hong Kong monetary policy follows the Federal Reserve with easing space remaining, and Hong Kong asset revaluation enters a new stage - the low valuation repair stage is ending, with industry allocation, structural opportunities, and operational techniques becoming more important in the second stage. From a strategic perspective, Hong Kong stocks are no longer being traded as an industry outside A-shares but as a capital market truly possessing numerous core and scarce assets.