【Iran Crisis】Guangzheng International's Tang Lihong: Market worries that the conflict will be prolonged lead to continued stock selling; the rising dollar affects the performance of Chinese and Hong Kong stock markets

Everbright Securities International’s global market and foreign exchange strategist, Tong Lihong, admitted that after Trump’s “TACO (Trump Always Chickens Out),” the deadline for attacks has been extended to next week, causing the market to worry about prolonged warfare and continue selling stocks, which will negatively impact the Hong Kong and Chinese stock markets.

Watch for potential redemption restrictions in funds

She pointed out that oil prices have risen above $100 per barrel, and high oil prices are bringing back the inflation crisis, which has already affected the monetary easing policies of various central banks. Currently, investors are concerned that the Federal Reserve will not cut interest rates this year, leading to tighter liquidity, coupled with the US dollar rising above the 100 level. All three factors are impacting emerging markets and the Hong Kong and Chinese stock markets.

She mentioned that investors should pay attention to whether private equity funds may experience redemption restrictions in the short term, as the associated risks could dampen investor sentiment and raise concerns that it could trigger another financial crisis.

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Tong Lihong added that although a strong dollar is unfavorable for emerging market stocks, the offshore yuan is performing strongly, indicating that funds are still willing to stay in Hong Kong stocks for medium to long-term investment opportunities.

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