According to Jinshi Data, CICC Research Report said that the Fed's interest rate cut is expected to open up room for domestic interest rate cuts, which will help alleviate the current high financing costs. In the short-term interest rate cut transaction, you can focus on assets that benefit from liquidity. Historical experience shows that Hong Kong stocks are better than A shares. Growth sectors such as semiconductors, automobiles (including new energy), media entertainment, software, and biotechnology may have higher elasticity.
On the contrary, high dividends may underperform in stages, but this is also normal. Short-term liquidity drive does not change the overall allocation pattern. Unless the fiscal policy makes a big effort to hedge against the contraction of private credit, the structural market will still show a volatile pattern.
The bank recommends focusing on three directions: downward overall returns (high dividends and high buybacks with stable returns, i.e. "cash cows" with ample cash flow), local leverage (policy support and still-prosperous technology growth), and local price increases (natural monopoly sectors, upstream and utilities).
