Futu Spotlights 2025 Investment Prospects: Navigating Global Volatile Markets with Diversified Strategies

(Hong Kong, December 12, 2024) – In the wake of the 2024 U.S. presidential election, the global economy faces a year of recalibration mixed with uncertainties and untapped potential ahead. Today, Futu Securities International (Hong Kong) Limited ("Futu"), a leading digital brokerage, shared its investment strategies at an annual sharing session. The firm's market experts Alan Luk, Chief Strategist, Arnold Tam, Chief Analyst; and Daniel Tse, Managing Director at Futu highlighted the theme of diversified strategies for investors to navigate risks effectively while capitalizing on a broad spectrum of opportunities amid the market fluctuations.

Hong Kong stocks : rebound with caution

While the macroeconomic environment pressures Hong Kong’s stock market, certain sectors may still shine. “Hang Seng Index (HSI) has exhibited a ‘low-to-high’ pattern this year, aligning with the prediction we made in 2023. Currently, HSI's valuation (P/E at around 9.1x) is below its 5-year average. Based on earnings forecasts, if valuations return to this average level next year, the HSI could reach 24,200 points, with an optimistic target of 27,600 points,” said Alan Luk, Chief Strategist at Futu.

However, persistent global trade tensions and lingering uncertainties around China's economic trajectory pose challenges that could constrain the profitability of HSI constituent stocks. Alan added, “Trade conflicts among major economies cast a shadow over China’s economy and the earnings potential of HSI constituents. Without further stimulus measures, the HSI is likely to fluctuate between 16,900 and 24,200 points, with stronger performance expected in the first half of the year compared to the second. Nonetheless, certain sectors may still perform well. For example, thematic investments like the traveling sector are poised to be compelling picks, due to a strong tourism trend in 2024.”

Strategic diversification amid U.S.-China tensions

Amidst escalating global economic and geopolitical uncertainties, investors can diminish risks and unlock potential returns by diversifying their portfolios across Hong Kong stocks, U.S. equities, and emerging cryptocurrency markets.

“With U.S.-China relations likely to remain tense in 2025, the correlation between U.S. and Chinese assets will likely remain low. Investors should monitor the performance of diversified assets, including Hong Kong stocks, U.S. equities, and cryptocurrencies, to balance risks. In Hong Kong, the technology and consumer sectors, known for their steady cash flows and reasonable valuations, are worth attention. In the U.S., AI themes will remain dominant, but the focus will shift towards its effective monetization strategies. These themes will also extend into adjacent areas like autonomous driving and software applications,” said Arnold Tam, Chief Analyst at Futu.

Regarding cryptocurrencies, Arnold reaffirmed that Bitcoin and Ethereum are still the foremost areas of interest, “Bitcoin and Ethereum remain the primary focus. Bitcoin is valued for its scarcity, while Ethereum is anticipated to enable broader applications of cryptocurrencies. Although Bitcoin’s price has previously dropped from nearly $100,000, the enthusiasm for cryptocurrency investment remains strong. Based on historical monthly charts, Bitcoin’s rounded bottom is around $16,000, with a 2021 peak of $69,000. Using measured projections, Bitcoin could challenge $122,000 in the medium to long term.”

Futu’s roadmap for investor success in a dynamic market landscape

As Hong Kong’s largest retail brokerage, Futu provides a comprehensive suite of financial tools and investment categories to meet investors' increasing demand for flexibility, allowing them to stay agile and seize opportunities in an ever-changing market environment.

“Next year, both Hong Kong and U.S. stocks present challenges and opportunities. As a brokerage, Futu aims to offer more investment options and maximize capital flexibility for investors. As AI-driven themes solidify their prominence in the U.S. markets, Futu is equipping investors with advantages for trading U.S. stocks. This includes maximizing the edge of U.S. Stock Regular Savings Plan (RSP) function by combining intelligent investment strategies. Additionally, as the global regulatory landscape surrounding virtual assets continues to mature, investments in this burgeoning space are expected to see substantial growth in the year ahead. Futu plans to further improve deposit and withdrawal experiences and enhance investor education on virtual assets.  Recently, our platform recorded a record-breaking IPO subscription amount of HKD 90.5 billion, reflecting renewed momentum in the IPO market. Next year, we will also explore special offers for key IPOs,” said Daniel Tse, Managing Director at Futu.