Your current location:HOME >politics >Goldman Sachs upbeat on A shares 正文
TIME:2024-05-21 12:59:45 Source: Internet compilationEdit:politics
Goldman 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.
Pope trip to Luxembourg, Belgium confirmed for September, 2 weeks after challenging Asia visit2024-05-21 12:52
Greater choice gives tourism sector a boost2024-05-21 12:35
China receives over 18 mln reports on illegal online content in March2024-05-21 11:50
Holistic pursuit of national security lays solid groundwork for China's rejuvenation cause2024-05-21 11:25
Shooting injures 2 at Missouri high school graduation ceremony2024-05-21 11:21
34th Phoenix Chinese Week Culture and Cuisine Festival held in Arizona2024-05-21 11:05
Springtime blossoms add cheer to tourism2024-05-21 10:53
Shanghai sculpture show sees Rodin, Sanxingdui in dialogue2024-05-21 10:45
Investigators return to Long Island home of Gilgo Beach serial killing suspect2024-05-21 10:31
Why are young Chinese streamlining, personalizing their wedding ceremonies?2024-05-21 10:25
Jessica Biel CHOPS her long locks into a bob after book signing in Studio City2024-05-21 12:47
China releases typical cases endangering national security2024-05-21 12:27
A's rally from 5 runs down, beat Nats 72024-05-21 11:26
In pics: sailing race at 19th Asian Games2024-05-21 11:10
Red Lobster seeks bankruptcy protection after closing some restaurants2024-05-21 11:05
Springtime blossoms add cheer to tourism2024-05-21 11:04
Chase Elliott drives backward after Texas win that could get him going in the right direction again2024-05-21 10:56
Highlights of Hangzhou Asian Games2024-05-21 10:53
Dodgers acquire pitcher Yohan Ramírez from Mets for cash2024-05-21 10:35
A's rally from 5 runs down, beat Nats 72024-05-21 10:14