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On April 2, DBS published a research report indicating that the recent share price of GCL Technology (03800.HK) is expected to largely follow the cyclical changes in polysilicon prices. In addition, the government may introduce policies to control production or even eliminate backward production capacity, which will become a catalyst for the share price. It is currently expected that GCL Technologys production will drop by 30% this year, and the average selling price of products is expected to increase by more than 10%, offsetting the impact of the decline in production. DBS maintains a buy rating on GCL Technology. Considering that the profit recovery is slower than expected, it lowered its profit forecast for this year from RMB 1 billion to RMB 61 million. It believes that the average selling price will rise and costs will fall, and the profit will rebound to RMB 1.7 billion next year. The target price is lowered from HK$1.35 to HK$1.3.On April 2, market research firm Omdia reported that the annual revenue of the semiconductor market surged by about 25% to $683 billion in 2024. This sharp growth was attributed to strong demand for AI-related chips, especially high-bandwidth memory (HBM) used in AI GPUs, which led to an annual growth rate of 74% in the memory field. After a challenging 2023, the rebound in memory helped boost the overall market. However, this record year masked an uneven performance across the industry. The data processing sector grew strongly, while other key sectors such as automotive, consumer and industrial semiconductors saw revenue declines in 2024. These struggles highlight the weak links in the originally booming market.On April 2, DBS published a research report indicating that the restructuring of Agile (03383.HK) is ongoing, and as a valuable overseas asset in which it holds 45% of the shares, A-Life (03319.HK) may be included in the overseas restructuring plan, and part of the outstanding overseas debts may be offset through credit enhancement or debt-to-equity swaps. Therefore, the restructuring of Agile will put pressure on the share price of A-Life in the near future. In addition, there is still uncertainty as to whether the uncollected receivables from third parties and related parties can be recovered. Considering the limited profit prospects, based on the downward revision of revenue and profit margin forecasts, DBS further lowered the profit forecast of A-Life for this year and next year by 21% to 25%, maintaining the hold rating, and the target price was raised from HK$2.6 to HK$3.Goldman Sachs Group Inc. expects the yen to climb to the bottom of the 140 range against the dollar this year as unease about U.S. economic growth and trade tariffs boost demand for the safest assets. Kamakshya Trivedi, head of global foreign exchange, interest rates and emerging market strategy at Goldman Sachs, said the yen would provide investors with the best currency hedging tool if the likelihood of a U.S. recession increases. Reaching the 140 level would mean a 7% increase from current levels, and the banks forecast is more optimistic than the median of 145 in the agencys survey of analysts. "The yen tends to perform best when U.S. real interest rates and U.S. stocks fall at the same time," Trivedi said.Hong Kong-listed auto stocks fluctuated upward, with Leapmotor (09863.HK) rising more than 9%, Geely Auto (00175.HK) rising nearly 5%, NIO (09866.HK) and Li Auto (02015.HK) both rising more than 1%.

The loose competition continues! Investors expect the Fed and the European Bank to maintain low interest rates for a long time

Oct 26, 2021 11:05

A survey by Deutsche Bank shows that a considerable number of investors expect that the Fed and the European Central Bank will still maintain a slightly loose monetary policy for a long period of time.



Deutsche Bank conducted a market sentiment survey of more than 600 investment professionals around the world from October 6 to 8. For the Fed, the survey showed that 42% of people expected the Fed to remain slightly dovish, and 24% expected that the policy would be "Roughly correct," 33% of people expect the Fed's stance to be more hawkish.

For the European Central Bank, respondents believe that the central bank is more likely to make dovish policy mistakes. 46% expect the ECB policy to continue to be loose, 26% believe that the policy will be “roughly correct”, and 21% believe that the ECB is prematurely or excessively tightening.

For the Bank of England, 45% believe that the central bank’s risk of hawkish policy errors is greater, 20% believe that the policy will be “roughly correct”, and 20% believe that it will remain dovish.

It is understood that in recent weeks, major central bank policymakers have been cautious, seeming to adopt a "wait and see" attitude towards the prospect of inflation and interest rate hikes.

Andrea Enria, chairman of the European Central Bank’s board of supervisors, said on Thursday that although the euro zone’s economic outlook has improved, “cautiousness remains the key”.

At the September meeting, the European Central Bank postponed some important decisions to December, but since then, soaring energy prices have pushed the Eurozone inflation rate to a 13-year high of 3.4% year-on-year. Analysts expect that inflation in the euro zone will continue to rise. Fabio Balboni, a senior economist at HSBC, said in a research report on Monday that although the differences within the European Central Bank are widening, Lagarde may give reasons at the October meeting, requesting Maintain a highly relaxed stance.

The Governor of the Bank of England Bailey gave the clearest hint so far on Sunday that the UK may raise interest rates and said the Bank of England will “have to take action” to curb inflation.

David Page, head of macro research at AXA Investment Managers, pointed out in a report last week: “We have changed our forecasts. We expect the Bank of England to raise interest rates for the first time in February next year. 0.15% to 0.25%). Then we consider the second (to 0.50%) and third (to 0.75%) rate hikes in August. However, the short-term interest rate market considers a faster pace of rate hikes, including The first interest rate hike in December this year has almost completely digested the expectation of raising interest rates to 1.00% by the end of 2022."

Most investors surveyed by Deutsche Bank predict that the Fed and the European Central Bank will maintain low interest rates for a long time, and the U.S. dollar and the euro will therefore still be in a pattern of "competitive devaluation". Investors need to pay attention to this.



GMT+8 At 8:30 on October 19, the U.S. dollar index was reported at 93.88.

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