Current location:World Wave news portal > business
Goldman Sachs upbeat on A shares
World Wave news portal2024-05-21 15:00:55【business】6People 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://unitedarabemirates.lochsaege.com/html-22b699343.html
Very good!(7244)
Related articles
- NBA playoffs: Edwards leads Wolves to 98
- Dortmund's Reus hopes to sign off in style
- REVEALED: New PROOF the anti
- Big Ten women's basketball schedule brings USC, UCLA to conference's easternmost schools
- Yu Darvish extends scoreless innings streak to 25 in Padres' 9
- Wilson wins first
- Man who went THREE months without a bowel movement had hardened waste stuck in his colon
- Met Gala raises more than $26 million to fund Costume Institute
- Amtrak train hits pickup truck in upstate New York, 3 dead including child
- Brazil's soccer federation suspends matches because of flooding
Popular articles
Recommended
The government wants to buy their flood
Ryan Garcia reportedly wants 2nd drug sample tested after 1st was positive for banned substance
Official resigns after guilty plea to drug conspiracy in Mississippi and North Carolina vape shops
New Mexico high court upholds man's 3 murder convictions in 2018 shooting deaths near Dixon
'The Apprentice,' about a young Donald Trump, premieres in Cannes
I was left with second
Wilson wins first
Ryan Garcia reportedly wants 2nd drug sample tested after 1st was positive for banned substance
Links
- CONTRIBUTIONS STANDARD TERMS AND CONDITIONS
- Meghan Markle continues to wear neutral clothing four years on from the Sussex's 'freedom flight'
- CONTRIBUTIONS STANDARD TERMS AND CONDITIONS
- China news: Solomon Islands strikes $95 million Huawei internet deal
- From deep sadness to dazzling pomp, 15 key revelations from the must
- Hamas delegation leaves Gaza truce talks in Cairo without deal
- Lucas Tindall has inherited distinct expression from father Mike as these photos show..
- About MailOnline
- Who is Tiggy Legge
- Time for some Royal R&R! King Charles and Queen Camilla arrive in Aberdeen for a restful