The latest institutional research highlights growing optimism around A-share market opportunities, particularly in sectors poised for catch-up gains, while digital asset innovation—especially stablecoins—is gaining momentum amid supportive regulatory developments. As global financial frameworks evolve, investors are repositioning portfolios to capture structural shifts in technology, finance, and cross-border payment systems.
Key Market Insights
Hong Kong’s Digital Asset Push: Stablecoins Take Center Stage
On June 26, the Hong Kong Special Administrative Region government released its Digital Asset Development Policy Statement 2.0, reaffirming its ambition to become a global innovation hub in digital finance. A major focus of the updated policy is stablecoins, now positioned as a core tool for integrating financial innovation with real-economy applications.
The declaration outlines a comprehensive strategy covering regulatory clarity, use-case expansion, and ecosystem development. Financial Secretary Paul Chan emphasized that the initiative reflects Hong Kong’s long-term vision to foster a vibrant digital asset environment through diversified applications and institutional support.
👉 Discover how digital finance innovations are reshaping investment landscapes
What are stablecoins?
Stablecoins are cryptocurrencies designed to maintain price stability by being pegged to reserve assets such as fiat currencies (e.g., USD), commodities like gold, or algorithmic mechanisms. They function as "digital cash," minimizing the volatility typically associated with cryptocurrencies like Bitcoin or Ethereum. By enabling near-instant settlement via blockchain while preserving value, stablecoins are emerging as critical infrastructure for global payments and financial inclusion.
In the week from June 23 to June 27, the Wind Stablecoin Index surged 16.7%, reflecting strong investor interest. This rally underscores growing confidence in stablecoins not just as trading tools but as foundational elements in next-generation financial systems—particularly in cross-border remittances and decentralized finance (DeFi).
Equity Market Outlook
Galaxy Securities: Hong Kong Stocks Poised for Upside
Galaxy Securities analysts, led by Yang Chao, believe Hong Kong equities remain attractively valued heading into the second half of 2025. With policy support bolstering technology and consumer sectors, the market shows potential for steady upward movement despite near-term volatility.
Key themes include:
- Healthcare and discretionary consumption stocks, which stand to benefit from pro-consumption policies.
- Technology and high-dividend yield names, offering both growth and income potential.
Given the current low valuation multiples, especially compared to historical averages,港股 (Hong Kong stocks) present compelling long-term opportunities for global investors seeking diversification.
Shenwan Hongyuan: Strengthening Long-Term Bull Case for A-Shares
Shenwan Hongyuan strategist Fu Jingtao highlights an evolving macro backdrop—marked by China’s manufacturing strength, RMB internationalization efforts, and U.S.-China strategic equilibrium—that supports a sustained bull market in A-shares.
Recent reforms enhancing the STAR Market’s (Sci-Tech innovAtion boaRd) financing capabilities have created fertile ground for innovation-driven industries such as:
- Artificial Intelligence (AI)
- New consumer models
- Innovative pharmaceuticals
While external demand softness and cautious sentiment around traditional consumption pose short-term headwinds, the 7–8 month window could see renewed policy stimulus. The firm recommends overweighting technology, innovative medicine, and消费升级 (consumption upgrade) themes for long-term capital appreciation.
Founder Securities: A-Share Catch-Up Rally on the Horizon
Founder Securities’ Yan Xiang identifies promising catch-up potential across several segments following A-shares reaching new yearly highs:
- Brokerage firms, seen as bellwethers of market sentiment and trading volume expansion.
- STAR Market and ChiNext stocks, driven by national priorities in tech self-reliance.
- Hang Seng Tech Index components, supported by improved liquidity conditions in Hong Kong.
Risks remain tied to broader market fluctuations and overseas volatility, but sector rotation dynamics suggest underperforming quality growth names may soon rebound.
Sector Spotlight: Digital Finance and Tech Innovation
Guotai Haitong: Digital Currency Reshaping Cross-Border Finance
Guotai Haitong analysts Fang Yi and Su Hui point to accelerating momentum in digital currency adoption, fueled by both international regulatory clarity on stablecoins and domestic policy tailwinds in China. These developments are elevating interest in:
- Cross-border payment infrastructure
- Blockchain-based trade finance
- Tokenized asset settlement
Additionally:
- AI agent deployment is ramping up, driving demand for advanced computing power.
- Pro-consumption policies are starting to show results in education, eldercare, and child-rearing sectors.
Recommended investment themes:
Digital currency, AI agents, silver economy, semiconductor consolidation, and strategic restructuring plays.
👉 Explore platforms enabling next-gen digital asset access
Guolian & Minsheng: Cyclical Manufacturing Gains Traction
Guolian & Minsheng’s Bao Chengchao notes a pronounced calendar effect in A-shares during June–July (Gregorian) or the fifth–sixth lunar months, where cyclical and high-growth sectors tend to outperform.
Historically strong performers include:
- Defense & aerospace
- Food & beverage
- Beauty care
- Electronics
With second-quarter earnings approaching, investors should prioritize industries exhibiting strong earnings momentum. Focus should shift toward cyclical manufacturing sectors showing resilient fundamentals amid macro uncertainties.
Western Lead Fund: Financial IT Drives Tech Rebound
Western Lead Fund reports strong performance in tech segments—particularly computer science, communications, and electronics—driven partly by sustained rallies in U.S. AI and chip stocks. Domestically, news of financial institutions gaining eligibility to trade crypto assets boosted financial IT stocks significantly.
Looking ahead:
- AI-driven tech sectors continue to benefit from policy and innovation catalysts.
- Commodities with limited supply, especially industrial metals, could gain amid expectations of Fed rate cuts.
- Domestic demand sectors supported by fiscal incentives remain attractive.
Macro & Fixed Income Views
GF Securities: Cautious on U.S. and German Bonds
GF Securities’ Liu Chenming warns of elevated global interest rates pressuring dollar-denominated assets. Capital is increasingly flowing into non-U.S. and emerging markets.
Strategic positioning:
- Equities: Favor European and emerging markets; overweight A/H shares.
- Bonds: Neutral-to-negative on U.S. Treasuries and German Bunds; prefer Chinese government debt.
- Currencies: Monitor EUR, JPY, and CNY dynamics closely.
- Commodities: Gold remains a top allocation due to safe-haven demand.
Galaxy Fund: Bond Market Lacks Clear Catalysts
With limited near-term data releases and ambiguous policy direction, Galaxy Fund sees the bond market entering a transitional phase marked by uncertainty. Although central bank reverse repo operations signal liquidity support, no clear fundamental improvement has emerged to shift yield trends decisively.
The outlook remains one of range-bound trading, with vigilance required on inflation prints and global rate trajectories.
Morgan Stanley Fund: Watch “Bond Market STAR Board” Developments
Morgan Stanley Fund’s Wu Huiwen highlights a novel concept—the proposed “bond market STAR board”—as a potential game-changer for fixed income innovation. As economic pressures mount in Q3, government bond operations and continued loose monetary conditions may create tactical opportunities.
Notably:
- Interest rate bonds offer more reliable entry points than credit instruments.
- Credit spreads historically tighten in July—a seasonal tailwind.
- Current credit market gains appear late-cycle (“fish tail” phase), warranting caution.
Asset Allocation Strategy
Guolian & Minsheng: Balance Between Tech Growth and Dividend Stability
As Q3 earnings disclosures approach, Guolian & Minsheng advises a dual-track allocation:
Growth/Tech: Prioritize sectors with clear earnings visibility and structural tailwinds:
- AI产业链 (AI supply chain)
- Digital currency
- Semiconductors, telecoms, media, electronics, defense
Dividend/Reward: Maintain long-term exposure despite temporary ex-dividend drag in June–July:
- Large-cap financials
- Utilities
- Low-duration bonds in weak-growth environments
Additionally, relatively undervalued Hong Kong equities remain a strategic allocation choice.
Frequently Asked Questions (FAQ)
Q: What makes stablecoins different from other cryptocurrencies?
A: Unlike volatile digital assets like Bitcoin, stablecoins are designed to maintain stable value by being backed by reserves such as U.S. dollars or gold. This stability makes them ideal for everyday transactions, remittances, and as a store of value within digital ecosystems.
Q: Why are analysts bullish on A-share catch-up rallies?
A: After leading sectors reach new highs, capital often rotates into lagging but fundamentally sound areas like brokerages, tech innovation boards, and select Hong Kong-listed tech firms—creating short-to-medium term momentum opportunities.
Q: How might digital currency policies impact cross-border payments?
A: Clearer regulations on stablecoins and central bank digital currencies (CBDCs) can streamline international settlements, reduce transaction costs, increase speed, and enhance financial inclusion—especially across Asia and emerging markets.
Q: Are dividend stocks still attractive amid low interest rates?
A: Yes. In low-rate environments, high-quality dividend payers in sectors like finance and utilities provide stable income streams and act as portfolio stabilizers during equity market turbulence.
Q: What role does AI play in current market trends?
A: AI is driving demand across multiple layers—from semiconductor makers supplying chips to developers deploying AI agents in customer service, healthcare, and finance—making it a central theme in tech investing.
Q: Should investors be concerned about bond market volatility?
A: While rising global rates pose challenges, Chinese government bonds offer relative safety. Investors should differentiate between rate-sensitive duration plays and credit risk exposures, favoring the former in uncertain times.
👉 Stay ahead with tools that support digital asset exploration and portfolio diversification