Your current location:HOME >world >Goldman Sachs upbeat on A shares 正文
TIME:2024-05-21 16:42:38 Source: Internet compilationEdit:world
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.
Ohio judge to rule Monday on whether the state’s abortion ban stands2024-05-21 16:37
Zhang primed for shot at history2024-05-21 16:19
Heavy snow blocks roads, strands visitors in Xinjiang2024-05-21 16:10
Southwest China's Xizang Autonomous Region reports record tourism revenue in 20232024-05-21 16:09
US overdose deaths dropped in 2023, the first time since 20182024-05-21 16:05
Boeing delivers B787 Dreamliner to Juneyao Airlines2024-05-21 16:01
China's goal of engaging 300 million people in winter sports achieved: survey2024-05-21 15:44
Tightening her grip on greatness2024-05-21 15:00
With Djokovic awaiting the winner, Murray trails Hanfmann at rain2024-05-21 14:23
Xi Calls on China, S. Africa to Strengthen Four Partnerships in Golden Era2024-05-21 14:20
Target to lower prices on basic goods in response to inflation2024-05-21 16:40
Xi Orders All2024-05-21 16:39
China, Indonesia communicating over chemical plant blast2024-05-21 16:01
Xi Says BRICS Important Force in Shaping Int'l Landscape2024-05-21 15:51
Supreme Court declines to hear challenge to Maryland ban on rifles known as assault weapons2024-05-21 15:42
Xi Pledges China's Continuous Support for Cuba in Opposing Interference2024-05-21 15:39
China wins 2023 FIBA 3x3 Women's Series in Wuhan2024-05-21 15:19
National Games witnesses development of China's sports map2024-05-21 14:51
Ship that caused Baltimore bridge collapse has been refloated2024-05-21 14:49
Xi Orders All2024-05-21 14:05