The strong performance of A shares, Hong Kong stocks, foreign exchange and other assets since the beginning of the year has once again attracted the attention of foreign institutions.

Goldman Sachs Group, a big Wall Street bank, released a report saying that China's stock market is likely to rise by about 15% in the future, mainly because of several key policy adjustments, and the pace of China's economic reopening will be faster than expected.

In addition to Goldman Sachs Group, many foreign-funded institutions have also expressed their views on Chinese assets recently. In the first research report released in 2023 by MichaelHartnett, chief investment strategist of Bank of America Corporation, long Chinese stocks were listed as one of the top ten transactions of Bank of America in 2023.

At the same time, 10 billion private equity Rui County assets held the 2023 internal roadshow on January 9, which once attracted more than 30,000 spectators. Dong Chengfei, chief research officer and fund manager of Ruixun Asset Management partner, said that there may be many aspects of rebalancing in the A-share market in 2023, and he is optimistic about investment opportunities in new energy sectors such as scenery.

In addition, Gao Yuncheng, general manager of Jinglin assets, recently released a letter at the end of 2022, saying: "with the current valuation and fundamentals as the starting point, 2023 is a 'double-click year' to look forward to."

Goldman Sachs Group sings more about China's stock market again.

Goldman Sachs Group, who has been bullish on the Chinese stock market, has recently expressed his view that he is bullish on Chinese assets.

According to Goldman Sachs Group's latest research report, the Chinese stock market is expected to rise 15 per cent this year, while the renminbi is expected to rise to its highest level since April last year.

Goldman Sachs Group, a strategist including KingerLau, wrote in a report on Monday that the agency raised its 12-month target index for the MSCI China Index (MSCIChinaIndex) to 80 from 70, stressing that the main reason was overall low valuations and multiple support points in areas such as real estate, Internet regulation and policy stimulus.

In addition, Goldman Sachs Group, a team of currency strategists led by KamakshyaTrivedi, wrote in a report on Jan. 6 that the yuan is expected to rise to 6.50 against the dollar by the end of the year, compared with a previous estimate of 6.9.

The team led by KingerLau wrote, "in the global context of 2023, China looks well positioned in terms of economic growth, policy and inflation cycles. The current market background leads us to believe that the risk of continuing to undersell or short Chinese stocks is significantly higher than that of long Chinese stocks. "

The strong performance of Chinese assets since the beginning of the year may also be an important reason for changing the views of foreign institutions. With the optimization and accelerated reopening of China's epidemic prevention policy, gradual deregulation and support measures for the real estate sector have also given an additional boost, with the MSCI China index rebounding strongly since hitting a stage low.

Market data show that the MSCI China index, which hit a low of 46.92 at the end of October 2022, has rebounded to 68.79, a cumulative rebound of nearly 50 per cent.

The renminbi has also shown a strong appreciation, with the offshore renminbi falling as low as 6.3748 against the dollar in October 2022 and has now rebounded as high as 6.7664. The onshore renminbi also rebounded strongly against the dollar.

Goldman Sachs Group's team of currency strategists expects the renminbi to rise to 6.50 against the dollar by the end of the year, compared with a previous estimate of 6.9.

Goldman Sachs Group has been bullish on Chinese assets for many times. in December last year, at the meeting of Goldman Sachs Group's review of China's equity capital market in 2022 and its outlook for the coming year, Wang Yajun, co-head of equity capital markets in Asia (excluding Japan), said that since November 2022, the Chinese stock market has shown a relatively strong bull market signal, and the bull market is expected to continue.

"the three factors that have the greatest impact on the Chinese stock market are gradually improving in terms of fundamentals." Wang Yajun said that the opening-up policy has raised market expectations for the Chinese economy; strict regulation of the Internet industry is coming to an end; and the US Public Company Accounting Oversight Board (PCAOB) confirmed that inspections and investigations of accounting firms in mainland China and Hong Kong can be completed in 2022, alleviating the risk of delisting of US-listed stocks in the short term.

These foreign-funded institutions are also optimistic.

In addition to Goldman Sachs Group, Bank of America Corporation, Nomura Oriental International, UBS Securities, HSBC, Pioneer and other foreign institutions are also optimistic about the performance of Chinese assets in 2023.

In the latest report, Bank of America Corporation investment strategist MichaelHartnett predicts that in 2023, the global economy will experience a mild recession, inflation will fall, China's economy will recover, interest rates, yields, spreads, US dollars and oil prices will peak, US stocks will remain flat, and gold and precious metals prices will rise.

At the same time, Hartnett also pointed out the top 10 trading trends in 2023, one of which is to be long Chinese stocks. "China has high excess savings and is still a reverse long trading strategy for Chinese stocks."

Against the backdrop of recession in overseas developed countries, the market expects China's economy to stabilize between epidemic prevention optimization and stimulus policies in 2023 and achieve a cyclical and difficult recovery, according to the latest Nomura Oriental International research report. This means that the stock market is expected to start a rotation of industries with obvious macro characteristics, which is expected to outperform before and in the early stages of economic recovery, and will turn to growth after the trend of economic recovery is established.

Nomura Oriental International believes that in the medium to long term, the 2023 epidemic prevention policy is expected to gradually explore and continue to optimize in the recurrence of the epidemic, although its obstacles are long, but in the medium to long term towards a direction conducive to economic activities. Under the expectation of economic stabilization, the valuations of cyclical industries are expected to be repaired ahead of the improvement in economic data.

UBS Securities recently said that the overall forecast for China's GDP in 2023 is about 4.9%. From the demand side, consumption is the main momentum of economic growth for the troika of investment, consumption and export. Real estate on the investment side will rebound slightly from the bottom, the margin will begin to improve, manufacturing and infrastructure will slow slightly under the effect of a high base, but will always maintain a growth rate of about 6%, so in this context, there will be a small rebound on the investment side; the growth rate on the export side will decline.

With regard to the stock market, UBS Securities expects that China's policy of stable economic growth will continue to be implemented, and a series of monetary, fiscal, real estate and credit policies will be further strengthened, thus promoting the overall upward trend of the stock market. In terms of funds, in the next six months, at least 300 billion yuan of public offering funds will enter the market. There are no good official statistics for private equity funds. According to the quantitative model, UBS calculates that if private equity positions rebound slightly, it may bring additional capital of 300 billion yuan. In terms of overseas funds, it is expected that there will be a net inflow of more than 200 billion yuan in 2023.

HSBC forecasts year-on-year GDP growth of 5.0 per cent in 2023 and significantly raised its 2024 GDP growth forecast to 5.8 per cent from 4.8 per cent.

Pioneer pilot pointed out in its latest analysis that China is currently committed to optimizing epidemic prevention and control measures, promoting vaccine and drug research and development, and improving hospital facilities, which will help stabilize the economy. China's overall economy is expected to see a more obvious rebound after March 2023, and China's GDP growth rate for the whole of 2023 is expected to reach about 4.5%.

More than 30,000 people packed the roadshow! Dong Chengfei: a shares will face "rebalancing", so be optimistic about this sector.

On January 9, 10 billion Private Equity Rui County assets held its 2023 internal roadshow, which once attracted more than 30,000 spectators.

Dong Chengfei, chief research officer and fund manager of Ruixun Asset Management partner, said that there may be many aspects of rebalancing in the A-share market in 2023, and he is optimistic about investment opportunities in new energy sectors such as scenery.

Dong Chengfei also said that there may be many aspects of rebalancing in the A-share market in 2023. It mainly includes the rebalance of upstream and downstream profits, the rebalance of real and virtual, and the rebalance of Hong Kong stocks and A shares. Looking ahead to 2023, he believes that Hong Kong stocks should be more optimistic than A shares. Since 2021, Hong Kong stocks have given investors a poor feeling, mainly due to the disappearance of dividends in some industries and the deterioration of the external environment. At present, although the premium rate of Ahammer H has been expanded, it is still within a reasonable range. It is believed that the improvement of the general environment will bring about a rebalance of the performance of Hong Kong stocks and A shares.

For specific industries, Dong Chengfei said there is no doubt about the importance of energy prices to the global market in the coming years. Over the past year, both new and old energy have been hot spots in the capital market, with profit growth leading other industries. For 2023, Dong Chengfei believes that the demand for thermal coal will shrink in the future. One is the demand of the power industry, which may account for about 60% of the demand, while the other may be mainly building materials and chemicals, which account for 25% of the demand. Dong Chengfei believes that the demand for thermal coal in building materials and chemical industry in 2023 is likely to be negative growth, while the demand for electric thermal coal, negative growth will be a trend.

Assuming that China's electricity consumption grows at an annual rate of 4 to 5 per cent in the next few years, China's demand for new electricity will reach about 380 billion kilowatt-hours in 2023. However, the annual installed capacity of wind power in China exceeds that of 150GW in 2022. According to the calculation of wind power utilization hours and photovoltaic utilization hours, wind power installation can basically meet the new power demand every year before 2025.

Overall, Dong Chengfei expects China's thermal power demand to peak in 2023, and coal demand in the thermal power industry is likely to continue to grow negatively in the next few years. Starting from 2022 and 2023, after the total amount of new energy is large to a certain extent, the replacement of traditional energy occurs from quantitative change to qualitative change. The replacement of traditional energy is a trend rather than a cycle, and the price of traditional energy may enter a downturn. Dong Chengfei believes that the new energy revolution has just begun, its volume from quantitative change to qualitative change, began to squeeze the market share of traditional energy. In the face of shrinking demand, it is difficult for the price of traditional energy to remain high for a long time.

In addition, for the consumer sector, Dong Chengfei's view is "non-committal". Dong Chengfei believes that the future challenges in four areas may have an uncertain impact on the large consumer sector. It includes: the potential decline of the total population, the aging of the population, the "wealth effect" may decline or disappear after more than 20 years of bull market in real estate, and the internationalization of domestic excellent consumer enterprises lags far behind the manufacturing industry.

Hundreds of billions of Jinglin Gao Yuncheng: the stock market will welcome the "double-click year"

Gao Yuncheng, general manager of Jinglin assets, recently released the "letter at the end of 2022". The portfolio of Jinglin assets has suffered a lot in the past year, although it still recorded negative returns in 2022, but with current valuations and fundamentals as the starting point, 2023 is a double-click year to look forward to, he said in the letter.

Gao Yuncheng believes that the peak of US inflation and recession will curb the Fed's tightening of liquidity. A series of domestic easing and stimulus policies for economic recovery in China will provide a relatively loose liquidity environment for the stock market. Since the end of October last year, policy changes in the Internet, real estate and other industries have all moved in the direction of more encouraging development and regular regulation, and there has been an obvious inflection point in some important industry policies that have restrained macroeconomic development in the past two years. China's assets listed abroad have also been resolved with the expected stability of the Hong Kong stock market and the orderly promotion of Sino-US audit cooperation. "based on these performances, the valuation anchors of China's listed companies at home and abroad have a landing point again, and we can finally focus on corporate fundamentals again."

Gao Yuncheng believes that there are three main investment opportunities in 2023: first, firmly hold on to the companies that provide Chinese people with good services for living and working in peace and contentment, delicious and fun, and wait for consumption to recover after the epidemic; the second is to find the driving industries and enterprises that lead economic development, especially those with international competitiveness. The third is to find the reverse companies that live to death and the leftovers are king, and they have the opportunity to "kill" from the performance, valuation and liquidity of the past two years to the "three strikes" in the coming year.

Specific to the holding companies, Gao Yuncheng said, that is, three major categories and six business groups. Specifically: digital economy-big digital entertainment platform, large retail and service platform; brand consumer goods-communicative consumption of wine and self-fulfilling consumption of sportswear; China's advantage manufacturing-new cars, new energy, new materials.

Edit / lydia