Core Insights - The Shenzhen Stock Exchange and Hang Seng Index Company jointly released the Guozhen Hang Seng Greater Bay Area Digital Economy Index and the Guozhen Hang Seng Greater Bay Area Consumption Index during the 2025 Global Investor Conference [1] - The purpose of these indices is to provide distinctive cross-border investment targets and better serve investors' cross-border asset allocation needs [1] - This collaboration represents an innovative practice aimed at enhancing the interconnectivity mechanisms between Shenzhen and Hong Kong, supporting high-level bilateral openness [1] Summary by Categories Digital Economy Index - The Guozhen Hang Seng Greater Bay Area Digital Economy Index was developed to reflect the digital economy landscape in the Greater Bay Area [1] - It aims to attract investment and provide insights into the performance of digital economy sectors [1] Consumption Index - The Guozhen Hang Seng Greater Bay Area Consumption Index focuses on consumer trends and spending patterns within the Greater Bay Area [1] - It serves as a tool for investors to understand the consumption dynamics and opportunities in the region [1] Cross-Border Investment - The indices are designed to facilitate cross-border investment opportunities between Shenzhen and Hong Kong [1] - They aim to enhance the investment landscape by providing clear benchmarks for investors [1] Innovation and Collaboration - The partnership between the two index institutions is seen as a significant step towards fostering innovation in the financial markets of the Greater Bay Area [1] - It highlights the commitment to developing a robust framework for cross-border financial services [1]

Group 1 - The Morgan Stanley Capital International Asia-Pacific Index (MXAPJ) has fully recovered from its early-year decline and is approaching year-to-date highs, driven by increased trade agreement news, easing pressure indicators, a weaker dollar, and signs of tentative risk-taking in portfolio flows [1][4][7] - Goldman Sachs has updated its earnings growth forecasts for the Asia-Pacific region, projecting 7% and 8% growth for 2025 and 2026, respectively, compared to market expectations of 10% and 11% [1][13] - The market appears overly optimistic, with April's performance exceeding macro model predictions, and regional valuations have returned to moderate levels, aligning with Goldman Sachs' top-down P/E model estimates [1][16] Group 2 - Several factors explain the stock market rebound, including rising expectations for trade agreements, easing pressure indicators, a weaker dollar, and renewed foreign investment flows into emerging Asian markets [7][11] - Goldman Sachs maintains a preference for Chinese mainland and defensive sector allocations, overweighting China (favoring A-shares) and Japan while underweighting Australia and Taiwan [20][26] Group 3 - Goldman Sachs' earnings outlook remains bleak, with downward risks highlighted by trade disruptions and weak survey data indicating potential softening in U.S. and global demand [13][14] - The market's pricing seems overly optimistic, especially given the generally weak earnings growth backdrop, with various indicators showing that the region's expected P/E ratios have returned to average levels [16][17] Group 4 - Short-term consolidation is expected, with a projected -4% return over the next three months and a +4% return over the next twelve months, based on updated earnings expectations and a target P/E of 13.3x [17][30] - Scenario analysis indicates a potential upside of 6 percentage points and a downside risk of 23 percentage points compared to Goldman Sachs' baseline return forecast [20][22] Group 5 - Key themes include resilience in challenging macro environments, support from Chinese policies, sectors benefiting from artificial intelligence, and shareholder returns [31][32] - Stocks that may benefit from a weaker dollar have been identified, including companies in the travel, construction, and consumer goods sectors [36][37]