Goldman Sachs raises 12-month targets for MSCI China Index to 84 points and CSI 300 Index to 4,600 points, maintaining overweight rating on Chinese stocks.

Goldman Sachs raises 12-month targets for MSCI China Index to 84 points and CSI 300 Index to 4,600 points, maintaining overweight rating on Chinese stocks.

Goldman Sachs has revised its 12-month targets for the MSCI China Index and the CSI 300 Index, reflecting a bullish outlook on China's stock market. The investment bank has set its 12-month target for the MSCI China Index at 84 points, an increase from its previous target, and has raised its target for the CSI 300 Index to 4,600 points [1].

The upgrades come amidst a backdrop of positive developments in China's capital market. The recent progress in China-US trade relations has bolstered investor confidence, with global financial institutions adjusting their investment strategies to focus on Chinese high-tech stocks and AI development [1]. Additionally, China's policy orientation and market resilience have underpinned the long-term growth potential of Chinese assets, as highlighted by major financial institutions [1].

Goldman Sachs' latest report notes that Chinese financial assets have remained resilient, supported by broad US dollar weakness, signs of easing US-China trade tensions, robust activity growth, and effective domestic policy easing [1]. The People's Bank of China, China's central bank, recently announced an RRR cut of 0.5 percentage points for eligible financial institutions, further indicating the government's commitment to stabilizing markets and sustaining economic recovery [1].

The bank's revised targets also reflect optimism about Beijing's economic stimulus plans, which include pre-approving projects worth 200 billion yuan by month's end to meet the 5% growth target for this year [2]. Despite deflationary pressures, as indicated by September's CPI and PPI data, the fiscal stimulus measures are expected to support growth and bolster investor confidence in Chinese assets [2].

Goldman Sachs has maintained its overweight rating on Chinese stocks, underscoring its belief in the sector's potential for earnings growth and resilience in the face of external headwinds. The investment bank's bullish outlook is supported by the sector's strong fundamentals, including technological advancements in AI and semiconductors, and the government's commitment to policy stability [1].

References:
[1] https://www.morningstar.com/news/pr-newswire/20250514cn87713/global-times-china-us-trade-talks-market-resilience-boost-confidence-in-chinese-assets
[2] https://www.caixinglobal.com/2024-10-15/briefing-goldman-sachs-raises-china-gdp-growth-forecast-for-2024-102245287.html