Pan Guoguang, Head of Investment Strategy and Research at Fubon Bank (Hong Kong), stated that semiconductor stocks face selling pressure as US technology giants increasingly invest in their own semiconductor operations and require chip companies to use their services. Pan projects Hong Kong stocks could conservatively return to the 25,000 to 28,000 level by year-end, following anticipated recovery in US large-cap technology stocks. The analysis comes amid a global sell-off in chip stocks, with Pan noting that semiconductor sector stocks have accumulated substantial gains, and market sentiment is reversing as chip company expenditures increase.
US Tech Giants Invest in Semiconductor Operations
Pan Guoguang pointed out that the semiconductor sector has accumulated substantial price gains, and US technology giants are now investing directly in semiconductor operations while requiring chip companies to use their services. According to Pan, this shift will reverse market sentiment, with the Magnificent Seven US stocks poised to regain momentum in revenue, earnings, and stock prices. Pan stated that increased spending by chip companies will pressure stock prices, and the decline among global peers will continue for some time.
Hong Kong Stocks Projected to Reach 25,000-28,000 by Year-End
Pan Guoguang expects US stocks to potentially reach new highs by year-end as large-cap technology stock prices recover. He noted that Hong Kong stocks are structured similarly to US stocks, with heavyweight index constituents being technology giants and platform companies. Pan stated that Hong Kong stocks have the opportunity to stabilize following the upward trend of US stocks, with a conservative estimate of returning to the 25,000 to 28,000 level by year-end.
Middle East Conflict and Commodity Market Dynamics
Pan Guoguang mentioned that the Middle East conflict has escalated recently, with US midterm elections approaching. He stated that the Republican Party currently faces a weaker electoral position, and President Trump may implement TACO to avoid losing too many seats, which would limit oil price increases. Pan added that even if oil prices cannot rise significantly, they remain at high levels, requiring countries to allocate substantial funds to subsidize domestic oil purchases and support their economies. According to Pan, some regions will sell US Treasury bonds and gold reserves for cash, causing US Treasury yields—particularly long-term bonds—to remain elevated, while gold prices continue to consolidate, with $3,500 representing a stable bottom.
FAQ
What is Fubon Bank's year-end projection for Hong Kong stocks?
Pan Guoguang from Fubon Bank (Hong Kong) conservatively estimates that Hong Kong stocks could return to the 25,000 to 28,000 level by year-end, following the anticipated recovery of US large-cap technology stocks.
Why are semiconductor stocks facing selling pressure according to Fubon Bank?
Pan Guoguang stated that US technology giants are investing directly in semiconductor operations and requiring chip companies to use their services, causing increased expenditures that pressure chip stock prices and triggering a reversal in market sentiment.
