Citic Securities Predicts Bull Market Entry by Q4, Citing Global Policy Synchronization

Citic Securities has highlighted a significant window for investors, suggesting that the period from the end of the third quarter to the fourth quarter of this year could be a pivotal entry point for a bull market in the index. The firm's analysis indicates that global major economies are expected to synchronize their economic and policy cycles, leading to a simultaneous expansion in fiscal and monetary policies. This synchronization is anticipated to drive a substantial shift in market trends, moving away from the four-year cycle of mid- and small-cap themes to a more sustained trend focused on core assets.

The firm recommends focusing on three long-term trends. The first is the enhancement of China's independent technological capabilities. The second is Europe's efforts to rebuild its autonomous defense and increase its energy, infrastructure, and resource reserves. The third is China's policies aimed at improving social security and stimulating domestic demand. These trends are expected to influence industry choices, with a shift from increasing domestic production rates to advancing cutting-edge original technologies, from a focus on goods exports to a balanced approach of goods trade and technological cooperation, and from a consumption model driven by channels and unit prices to one driven by product innovation and brand upgrades.

From a strategic perspective, the most critical decision is to rebalance the allocation between mainland China and Hong Kong stocks, increasing the allocation to Hong Kong stocks. The next step is to return to core assets, focusing on emerging industries and leading companies in traditional sectors. Industry selection should prioritize the three long-term trends that are less affected by trade wars. Finally, timing is crucial, with the end of the third quarter to the fourth quarter identified as the key entry point for the index bull market.