Current location:Earthly Echo news portal > business
Goldman Sachs upbeat on A shares
Earthly Echo news portal2024-04-30 03:08:41【business】7People have gathered around
IntroductionGoldman Sachs, a global investment banking, securities and investment management firm, sees double-d
Goldman Sachs, a global investment banking, securities and investment management firm, sees double-digit growth potential in valuations of China's A shares, given the country's recently released nine measures to promote the high-quality development of the capital market.
Without indicating any timeframe, Goldman Sachs analysts on Tuesday projected certain upbeat scenarios for the A-share market. Citing the policy-driven upside potential as well as other positives like stabilizing economic growth and attractive current valuations, the investment bank said it remains overweight on A shares.
Kinger Lau, chief China equity strategist at Goldman Sachs, said, "We sense that international investor sentiment, risk appetite and interest are improving regarding Chinese equity markets."
This trend is partly attributable to China's better-than-expected economic performance in the first quarter, Lau said, which has led Goldman Sachs to raise its 2024 full-year growth forecast for China from 4.7 percent to 5 percent.
Goldman Sachs' overweight view on the A-share market is related to the "National Team "buying Chinese equities, solid fourth-quarter earnings results, a valuation level remaining close to cycle troughs and light positioning from investors globally, Lau said.
The guideline released by the State Council, China's Cabinet, on April 12 outlined nine new measures to boost the high-quality development of the capital market, and has added another layer of hope, he said.
The guideline was the third such document issued by the State Council on the country's capital market in the past two decades, demanding strengthened oversight over listed companies, including on cash dividends, strict regulation of entry into the capital market and intensified delisting regulations.
At a State Council study session on Monday that focused on further reforms of the capital market for its steady and healthy development, Premier Li Qiang stressed that it is necessary to take the implementation of the guideline as an opportunity to boost the reform and development of the capital market.
A Goldman Sachs report released on Tuesday shows that A shares could rise 19 percent if they could narrow the gaps with international averages along the dimensions of corporate governance standards, long-term investor ownership and shareholder returns, including dividends and buybacks.
In a more aggressive scenario where the Chinese equity market can match global leaders on those dimensions, there is as much as nearly 40 percent valuation upside potential for A shares, which the report referred to as a "blue-sky "scenario.
"What we're trying to say here is that even without the fundamental macro growth situation getting a lot better, but by just doing the right policy, there's still a lot of value to be unlocked from the stock market," Lau said.
With the nine measures to be gradually implemented, the investment theme of shareholder returns — which refers to investing in A-share companies with strong dividend payouts and share buybacks — would particularly present investment opportunities, Lau said.
Another leading global investment bank UBS has upgraded the MSCI China Index to overweight thanks to early signs of pickup in consumption.
However, Lau cautioned against the risk of potential worsening US-China trade frictions. "As we get into the (US) election events, we think there could be more noise and more policy risks from the US specifically targeting China, so that could be a key avenue for volatility for the Chinese assets."
Amid pressures on global equities due to worries about geopolitical tensions and the potential of the US Federal Reserve delaying rate cuts, China's key A-share market index hovered around 3,000 points this month, shedding 0.74 percent to close at 3021.98 points on Tuesday.
"The reality is that the political environment is one where there will be some pushback against Chinese imports," said Timothy Moe, Goldman Sachs' chief Asia-Pacific regional equity strategist and co-head of macro research in Asia.
This has made it important for China to stimulate domestic consumption to achieve stable economic growth, Moe said.
Nevertheless, it is unfair to blame the Chinese government's support as the sole reason behind the current disputes surrounding overcapacity and the world needs to understand the causes of the issue better, he added.
Address of this article:http://thailand.claboston.org/html-88a199873.html
Very good!(6273)
Related articles
- Chinese business group 'shocked, dissatisfied' over EU raids on Chinese company
- Damian Lillard sets Bucks' postseason mark with 35 points in opening half vs Pacers
- Jingdezhen ceramics shine bright under BRI
- Global exhibitors seek opportunities at consumer expo in Hainan
- Chinese, Cambodian martial artists make joint performance at famed Angkor
- Spain's Ebro
- Dakota Joshua scores 2 goals to help lift Canucks past Predators 4
- A dazzling legacy
- EU, Finnish leaders call for de
- ANDREW PIERCE: Will Keir criticism see Mandy back in the wilderness?
Popular articles
Recommended
Chemical and biological methods help restore ancient books in north China
Stone carvings found inside cave of China's Longmen Grottoes
With homelessness on the rise, Supreme Court to weigh bans on sleeping outdoors
The top 10 cities for job hunters revealed
Syrian, Russian forces destroy 'terrorist' strongholds in N. Syria
Olivia Dunne shares selfie in all
Maldives election: Voting begins in parliamentary polls
Oil consumption back to 2019 levels
Links
- Hong Kong greets 1.3 mln visits during Spring Festival holiday
- Spring Festival holiday sees 474 million domestic tourist trips in China
- Xi Pledges to Work with Milei for Sound Development of China
- China encourages NEV companies to set up research centers abroad
- The cultural seed bank of a civilization
- Experiencing traditional crafts at China International Fair for Trade in Services
- Summer movies set sizzling pace
- The Forbidden City hosted the Tea&World
- Xi's Article on Farmland Protection to Be Published
- Special performance for artists with Plum Performance Award and Peony Award was held