Goldman Sachs raises price targets on Chinese equities, predicts potential 35% returns in six months

From None: 2024-05-21 09:32:42

Goldman Sachs raises price targets on Chinese equities, launches China Recovery Portfolio, citing tail-risk compression trade in progress. MSCI China Index up 31% from January lows, 19% in past month, outperforming global indices. Historical analysis shows 60% chance of further rises, potential 35% returns in six months.

China’s macroeconomic performance surpasses expectations, first quarter GDP growth at 5.3%. Government measures to stimulate property sector include lower down payment ratios, increased lending facility. FOMO effect drives market surge, with concerns around policy and US-China tensions. Chinese equities less reactive to tensions due to better risk pricing.

Goldman Sachs portfolio includes 40 Chinese stocks, with bullish outlook projecting potential upside. Top holdings include Tencent, Alibaba, Meituan, BYD Co., Li Auto, and Trip.com. Market momentum remains strong despite US-China tensions, indicating favorable risk/reward ratio. Diversifying investments recommended for long-term growth in current climate.



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