Fubon Bank (Hong Kong) First Vice President and Head of Investment Strategy & Research, Pan Guoguang, forecasts that China's stable economy, combined with expectations that China is poised to win the artificial intelligence (AI) race, will drive a valuation recovery in Hong Kong stocks led by the technology sector. He estimates the Hang Seng Index has 15% to 20% potential upside, potentially testing the 30,000-point level this year.
He pointed out that developing AI is not merely a matter of having capital; it requires infrastructure, electricity, and critical minerals, indicating the industry has now entered a resource war. In terms of power generation, China's current output is double that of the United States, while the average residential electricity price is only half of America's. He expects China's power generation capacity to continue leading in the future and, with its advantage in rare earth resources among critical minerals, is optimistic about China's prospects of winning this competition.
Regarding U.S. stocks, he stated that their performance is one indicator of former President Trump's popularity. However, with current U.S. stock valuations being high, he anticipates Trump would focus on promoting the tech sector. He predicts that before the U.S. midterm elections, a large-scale mixed stimulus package combining fiscal and monetary measures will be launched to support stock and bond market performance while attempting to control bubbles. He forecasts a high single-digit percentage rise for the S&P 500 by 2026, with the Nasdaq potentially achieving double-digit growth.
Pan Guoguang also estimates that the U.S. Federal Reserve will implement two interest rate cuts in 2026. Should negative factors emerge for the economy and stock markets, the number of rate cuts could even increase.
On gold prices, he noted that gold's share of global central bank foreign exchange reserves has already surpassed that of U.S. Treasury bonds. With rising demand, he expects the gold price to break through $5,000 per ounce by mid-2026, while silver has the potential to surpass the $100 per ounce mark.
