Current location:Culture Currents news portal > opinions
Goldman Sachs upbeat on A shares
Culture Currents news portal2024-05-21 14:11:04【opinions】5People 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://dominicanrepublic.popular-vines.com/html-44d899099.html
Very good!(7)
Related articles
- Strictly star Giovanni Pernice's former partner Rose Ayling
- Burnley relegated from EPL after just one season because of loss at Tottenham
- Roger Corman, Hollywood mentor and 'King of the Bs,' dies at 98
- Randy Arozarena homers and drives in 4 runs, Rays beat Yankees 7
- Here comes the char
- Justin Allgaier uses dominant run at Darlington to win first Xfinity race of the season
- PWHL New York changing coaches with mutual agreement with Draper to step down and return to Alberta
- Putin calls Moscow terrorist attack bloody, barbaric, vows retribution
- Sweden beats France, Britain relegated after losing to Norway at hockey worlds
- Federal prosecutors request 40
Popular articles
Recommended
Georgia Republicans choose Amy Kremer, organizer of pro
China's foreign exchange reserves fall to 3.2 trillion USD in April
Fried, 2 relievers work 8 2/3 no
Man found dead after Ohio movie theater shooting. Person considered suspect is arrested
Hollywood star Shia LaBeouf is spotted on the streets of Gavin and Stacey's hometown Barry
Pirates add Paul Skenes to their roster ahead of his major league debut
Putin says four gunmen in Moscow terrorist attack arrested
Blues rise, Crusaders fall marks Super Rugby power shift in New Zealand
Links
- Stock market today: Asian shares shrug off Wall St blues as China leaves lending rate unchanged
- Beijing base to bring in 50 giant pandas in 2025
- How Phish is using the Las Vegas Sphere's technology
- China's top political advisory body starts annual session
- Mandisa, Grammy
- DAILY MAIL COMMENT: Police have a duty to defend Jewish rights
- China's civil aviation sector posts record Q1 numbers
- China's power use up 7.4 pct in March
- North Korea has fired multiple missiles into the ocean, South Korea says
- Chinese defense ministry refutes validity of Taiwan Strait's median line