The current actual holding levels of the short-term, medium-term, and long-term securities investment portfolios in this column are 75%, 50%, and 35% respectively, with market conditions categorized as neutral, significantly bearish, and significantly bearish. Over the past month, international oil prices have risen significantly, primarily due to ongoing tensions in the Middle East and OPEC's insistence on production cuts, causing market concerns over crude oil supply. At the same time, gradual recovery in demand from some major economies has further pushed up oil prices, intensifying market worries about a rebound in inflation. Investors expect the U.S. Federal Reserve to maintain high interest rates for a longer period, thus demanding higher risk premiums, which naturally pushes up U.S. bond yields, directly impacting the U.S. bond market. On the other hand, rising corporate borrowing costs, pressured earnings outlooks, and high-risk interest rates have weakened the attractiveness of stocks, leaving U.S. equities, especially high-valuation technology stocks with significant accumulated gains, facing substantial selling pressure.

Affected by high oil prices and continuously rising U.S. bond yields, the Hong Kong stock market has recently faced considerable selling pressure. The U.S. dollar has shown strength, and under the linked exchange rate system, market liquidity is constrained, creating an unfavorable environment for Hong Kong's financial sector. Meanwhile, rising oil prices have increased corporate operating costs, and with external stock markets fluctuating, Hong Kong investors have adopted a cautious approach, causing the overall market to fall into a volatile and bearish pattern. For the Hong Kong stock market to turn from decline to rise before the end of this year, three favorable conditions are needed: (1) strong mainland economic stimulus measures or fiscal policies being implemented to revive domestic demand, boost market confidence in economic recovery, and significantly improve corporate earnings prospects; (2) the U.S. Federal Reserve sending clear signals of interest rate cuts, driving down U.S. bond yields and the U.S. dollar, thereby releasing liquidity into global financial markets; (3) a de-escalation of tensions in the Middle East, elimination of concerns over crude oil supply, a decline in oil prices, reduced inflationary pressure, and the creation of a favorable rebound environment for stock markets. Chief Investment Advisor of Economic Times and Trading Times, Leung Yip-ho (Website: www.BennyLeung.com)

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