Current location:World Wave news portal > politics
Goldman Sachs upbeat on A shares
World Wave news portal2024-05-21 07:54:15【politics】8People 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://ukraine.downmusic.org/html-99e399599.html
Very good!(851)
Related articles
- Pentagon vows to keep weapons moving to Ukraine as Kyiv faces a renewed assault by Russia
- Cameron Diaz films Outcome with Keanu Reeves and Matt Bomer in LA
- Ohio attorney general warns student protesters in masks could face felony charges under anti
- Girl, 14, 'gang
- Brazil replaces injured goalkeeper Ederson in Copa America squad
- Why as a slim woman, I always have to tread on eggshells around my overweight friends
- King Charles and Queen Camilla tell double
- Indiana GOP governor nominee Mike Braun announces his choice for lieutenant governor
- 'Constantly learning' Imanaga off to impressive start with the Chicago Cubs
- Ohio attorney general warns student protesters in masks could face felony charges under anti
Popular articles
- Supreme Court declines to hear challenge to Maryland ban on rifles known as assault weapons
- Talulah Riley looks gorgeous in floaty floral dress as she cosies up to her husband Thomas Brodie
- Cameron Diaz films Outcome with Keanu Reeves and Matt Bomer in LA
- Japanese automaker Nissan reports 92% jump in profit as sales surge
Recommended
Saudi Arabia is going to sponsor the WTA women's tennis rankings under a new partnership
Think tank report highlights China's approach to modernization
Japanese automaker Nissan reports 92% jump in profit as sales surge
Sydney Sweeney will play history
US overdose deaths dropped in 2023, the first time since 2018
Urologist convicted of patient sex abuse, including of minors
Gnabry substituted because of an injury in first half of Champions League semifinal against Madrid
Gerard Butler transforms back into the rugged hero as Hampshire is turned into apocalypse
Links
- Moroccan asylum
- Harrison Butker's Kansas City Chiefs jersey among 'most popular' on the NFL's store
- After blaming his 2020 loss on mail balloting, Trump tries to make GOP voters believe it’s OK now
- Peterka has goal, 3 assists in Germany's 8
- Video appears to show Sean 'Diddy' Combs beating Cassie in 2016
- John Daly withdraws from the PGA Championship with a thumb injury
- Social divisions and hostile rhetoric in Slovakia provide fertile ground for political violence
- Bronny James hasn't impressed enough at the NBA Combine to be drafted, scouts reveal
- Marseille coach Gasset, 70, says he will retire at the end of the season
- At PGA, Rahm spikes club, then rallies into red numbers