Goldman Sachs downgrades rating of Chinese shares
Goldman Sachs: Goldman Sachs believes Chinese stocks are underperforming in Hong Kong and has downgraded its ratings. On the other hand, he has upgraded Indian stocks as he sees potential in them. Goldman Sachs experts including Timothy Mo believe the amount of money companies make in Asia will be a major factor influencing investment returns as overall economic conditions are good by comparison. Goldman Sachs downgraded the ratings of Hong Kong-listed Chinese companies to intermediate and downgraded the ratings of Hong Kong companies to below average.
Wall Street banks have been less optimistic about Chinese stocks this year and have reduced their expectations several times. In August, he lowered forecast earnings growth for the MSCI China Index for the full year and also lowered the index target for the next 12 months. Since then, the index has fallen about 3%. Goldman Sachs is still positive about Chinese onshore stocks, experts added. He believes that China-related sectors that focus more on sectors with high productivity and self-reliance, such as AI and new infrastructure, can perform well.
Experts believe that there are good chances of success in the onshore market, which is called ‘alpha’ opportunity. These opportunities help balance the challenges of housing issues, lots of loans and slow growth from not very good demographics. Experts predict that India will have the strongest long term growth in this sector, with earnings over the next two years at around Rs. Expected to grow by 15%Experts say India’s market is attractive because it mainly depends on domestic growth. Investors can find a variety of profit making opportunities, including “Make-in-India”, large companies with steady growth and smaller companies with high return potential.
