$Goldman Sachs (GS.US)$ The strategists remain bullish on the Chinese stock market, expecting the benchmark stock index to rise by about 20% by the end of the year.
Led by Kinger Lau, Goldman Sachs strategists stated in a report last Sunday that due torisk-return ratio.It is still favorable, and they maintain a bullish stance on onshore and offshore Chinese stocks.
They wrote: "As tariffs and policies become clearer, market sentiment and liquidity conditions could start to improve by the end of the first quarter of 2025."
Goldman Sachs advises investors to buy government consumer agencies, emerging market exporters benefiting from the yuan's movement, and selected technology and infrastructure stocks. They noted that, meanwhile, shareholder returns "should continue to benefit from record cash distributions and declining domestic interest rates."
In addition, the strategists also maintain a bullish rating on online retail, media, and medical care stocks, while upgrading the rating of consumer services stocks to bullish.
As early as November last year, Goldman Sachs predicted that with the government's increased support measures, the Chinese stock market could rise by about 20% within the next 12 months.
$HSBC HOLDINGS (00005.HK)$ Similarly optimistic, the bank stated last week that given China's "favorable policy statements" and better economic growth prospects, the company is bullish on Chinese stocks listed in Hong Kong.
HSBC Holdings strategists Herald van der Linde and Prerna Garg wrote in a report that the Hang Seng H-Share Index ETF could rise by 21% by 2025. They raised the year-end expectation for the Hang Seng H-Share Index ETF from the previous 8610 points to 8800 points.
HSBC's strategists also upgraded the rating of the Hong Kong stock market from neutral to shareholding, while downgrading the rating of the Indian stock market to neutral. The rating of South Korean stocks was upgraded from "reduce" to "neutral".
HSBC Holdings strategists indicated that interest rate cuts and measures to promote tourism would support the Hong Kong stock market. They said, 'China's economic outlook has improved, and the recent shift in policy tone certainly reinforces the determination to stabilize the economy. This is a good sign for the A-share market, and we believe the Hong Kong market will be a long-term beneficiary.'
In January last year, HSBC predicted that the Hang Seng H-Share Index ETF would rise by about 24% in 2024. The Index had increased by 26% by the end of last year.
"Recent policy initiatives indicate that the risk of immediate profit growth declining has been avoided," the strategists wrote in this report. "This is crucial for mitigating tail risks and restoring market confidence when households hold over 20 trillion dollars in cash savings."
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