On the afternoon of April 2 (local time), US President Donald Trump announced a reciprocal tariff policy at the White House. The policy imposes varying tariff rates on imports from different countries and regions, with a 34% tariff levied on Chinese imports.
Mr. Chan, Managing Director of pension advisory firm GUM, stated today (April 3) that the new tariff policy is expected to have limited impact on Hong Kong stock market performance. He noted that since Trump's first term, the export landscape in Asia has already undergone a transformation, with decreasing reliance on the US market.
Chan highlighted that with the implementation of economic stimulus measures from China's Two Sessions, domestic consumption has shown significant improvement. Coupled with breakthroughs in the mainland's tech industry, these factors are likely to support the performance of HK stocks.
Chan predicts the Hang Seng Index could rise to 24,000 points by the end of Q2, with returns from HK equity funds in the Mandatory Provident Fund (MPF) system potentially increasing by 1% to 2%.
GUM believes the US tariff policy is unlikely to bring substantial short-term improvements to the American economy. Market reactions remain muted, and GUM expects US stocks to perform steadily in Q2, with the S&P 500 Index likely to hover around 5,500 points by the end of the quarter.
Mr. Wan, GUM's Director of Strategy and Investment Analysis, pointed out that the economic stimulus package introduced by the mainland last September, coupled with the emergence of the artificial intelligence (AI) platform DeepSeek this year, has significantly boosted HK stock valuations. However, net outflows from HK equity funds in those months amounted to HK$4.2 billion and HK$5 billion, respectively.
Wan noted that despite the recent recovery in HK stock performance, it still lags behind US stocks over the past five years. He believes investors need more time to regain confidence in HK equities.
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