Goldman Sachs Group Inc. forecasts that Chinese stocks might increase by another 15% and that the yuan could reach levels not seen since April due to the country’s reopening and many significant policy changes. The firm increased its MSCI China Index 12-month goal from 70 to 80 due to low valuations and policy changes in areas like geopolitics, internet regulation, and housing. In addition, Goldman Sachs predicts that reopening optimism will cause the yuan to rise to 6.5 per dollar by year’s end, up from its earlier prediction of 6.9.
These forecasts come at a time when Chinese equities are off to a solid start for the year, with traders returning to the market as the nation gradually eases COVID-19’s tough border controls and lifts some of them.
Over the past two months, the MSCI China Index has outperformed global counterparts, rising 48% from an October low. Due to a quicker than anticipated reopening, the macroeconomic recovery, and relaxing regulations, the brokerage also anticipates significant earnings growth for the country’s internet sector.
You must be logged in to post a comment.