Beijing’s generous stimulus measures prompted major Wall Street firms such as HSBC and BlackRock to upgrade their ratings.
That’s the view of Goldman Sachs strategists , who have recommended an «overweight» stance on Chinese stocks, estimating that they could rise another 15% to 20% if the country’s authorities implement more economic stimulus measures.
The government’s recent announcements «led the market to believe that policymakers have become more concerned about taking sufficient measures to reduce the risk of left-tail growth ,» according to experts.
However, this did not boost valuations . In fact, companies are still trading below their historical average . And as earnings may improve and global investor positioning is still weak, the upside potential is still intact.
Beijing’s generous stimulus measures prompted major Wall Street firms such as HSBC and BlackRock to upgrade their ratings, reflecting rising expectations that the previously slumping stock market has finally put the crisis behind it .
Goldman Sachs has therefore raised its target for the MSCI China Index and the CSI 300 to 84 and 4,600 points, respectively . The bank nevertheless warned of potential challenges, including weaker-than-expected fiscal stimulus, profit-taking, the US election and tariff risks.
