We Maintain a Mild Overweight Position in China Equities, Says HSBC’s Fan

The video discusses the strategic decision to trim Chinese equities by half due to trade tensions, while maintaining a mild overweight position in anticipation of China's policy response. It outlines benchmark targets for indices like the Hang Seng and MSCI China, based on the expectation of a US-China trade agreement. The focus shifts to the domestic growth potential of the Chinese market, given its earnings structure. The video concludes with an outlook on the potential for resolution through negotiation, emphasizing the importance of monitoring upcoming events like the G20 summit.

Why did the strategy involve trimming the allocation of Chinese equities by half?

• To increase exposure to US equities

• Because of a decrease in Chinese corporate earnings

• Due to expected stronger policy responses from China

• To completely exit the Chinese market

What is the year-end forecast for the Hang Seng index?

• 29,000

• 33,000

• 31,000

• 35,000

What is the base case scenario regarding the US-China trade deal?

• The trade tensions will escalate further

• A full agreement will be reached

• A partial agreement will be reached

• No agreement will be reached

What percentage of MSCI China's top line earnings is derived from the US market?

• 10%

• 5%

• 15%

• Less than 1%

What event is closely monitored for its impact on trade negotiations?

• The US Presidential Election

• The United Nations General Assembly

• The G20 Summit

• The World Economic Forum