Futu Spotlights 2024 Investment Prospects: Anticipates Rebound Potential for Hong Kong Stocks, Highlights Diversified Allocation and Value Investing

(Hong Kong - December 12, 2023) After a lengthy interest rate hike cycle in 2023, the global stock markets are seeing a new landscape. As a leading technology securities firm in Hong Kong, Futu Securities International (Hong Kong) Limited ("Futu") held its annual investment strategy sharing session at its FUTU Store earlier today. During the sharing session, Futu's Chief Strategist Alan Luk, Senior Strategist Arnold Tam, and Managing Director of Futu Securities, Daniel Tse, offered their insights in to the investment market performance in 2023 and the outlook for 2024. It's expected to see a higher chance of a rebound in Hong Kong's stock market in 2024, while value investing and diversified investment allocation are preferred.

Two potential factors to fuel momentum in Hong Kong stocks

The Federal Reserve's interest rate hike cycle has exceeded market expectations, and the strength of the U.S. dollar, coupled with potential risks emanating from China's real estate sector, has kept the Hong Kong stock market weak throughout 2023. Nevertheless, potential investment opportunities may arise from this situation. Alan Luk, the Chief Strategist at Futu, stated, "The Hang Seng Index's current point base is relatively low compared to the past ten years. A reasonable estimated range for the Hang Seng Index's annual volatility in 2024 falls between 5,000 and 7,000 points. If the market continues to decline this month, there will be a higher likelihood of an upward trend in the Hong Kong stock market next year due to two factors: the Federal Reserve initiating interest rate cuts before May and the restoration of market confidence in China's economy. However, it should be noted that these factors may not materialize in the short term. The Hang Seng Index may still test its lows in the first quarter of 2024, but there is a possibility of an upward trend in the second and third quarters."

Value Stocks and Long-term Bonds

In 2023, the Hong Kong and U.S. stock markets showed diverging performances, with value stocks generally outperforming. According to Arnold Tam, a Senior Strategist at Futu, "Early this year, the initial gains in U.S. stocks were mainly concentrated in large-blue chips stocks, but as expectations of interest rate cuts emerged, the stock prices of small and mid-cap stocks began to rise. In terms of specific themes, stocks benefiting from the development of AI, such as Apple (AAPL) and Microsoft (MSFT), are viewed optimistically, and Tencent (00700.HK) is the preferred choice in the Hong Kong stock market." Regarding the asset allocation strategy for the upcoming 2024, Tam believes that "The expectation of a Federal Reserve interest rate cut is unlikely to result in a major bull market in U.S. stocks. On the contrary, there may be an increase in short-term bubble risks." Tam recommends that investors shift their attention to long-term bonds, such as bond ETFs with maturities of 20 years or more, along with relatively stable money market funds."

Futu empowers investors with investment tools for better liquidity and flexibility

Futu, as the largest retail securities firm in Hong Kong, is dedicated to empowering local investors by offering a range of wealth management and investment options, providing them with the tools needed for better liquidity and flexibility. According to Daniel Tse, Managing Director of Futu Securities, "Given the uncertainty surrounding the timetable for interest rate hikes, stock markets will see some challenges. Investors in 2024 are expected to approach opportunities for a rebound with caution, but overall investment sentiment is anticipated to strengthen. Futu's focus will be on promoting flexible wealth management strategies, including our cash management product, Cash Plus. This tool helps investors maintain returns while they wait, allowing them to re-enter the market at the opportune moment. Recognizing the strong demand for information and market quotes from investors, Futu has made level 1: real time Hong Kong stock quote available for free to all users. We are also working on enhancing our quote information tools, including ongoing research on options quote upgrades. In terms of the IPO market, we anticipate a slight rebound in the number of new listings in the first quarter of 2024. Under the newly introduced Fast Interface for New Issuance (FINI) system, Futu will closely monitor to see if new stock investments may boost broader market demands as well as potential business opportunities for us."

[1]Daniel Tse, Managing Director of Futu Securities (left one),  Arnold Tam, Futu's Senior Strategist (left two),  Alan Luk, k, Futu's Chief Strategist (left three)