The Chinese government is continuing its economic recovery plan and trying to get back on track with the GDP growth target of 5% for this year. Last week, new measures for the real estate sector worth between two and three trillion yuan (between 256 billion and 388 billion) were added to the recovery plan announced at the end of September (including the reduction of interest rates). interest in euros). The government’s commitment to asian giant trying to revive the country is boosting the Chinese stock market, but also the rest of the emerging markets. The MSCI Emerging Markets Index is at a two-year high and its potential exceeds that of the global stock market.
That same Monday, China once again presented worrying macroeconomic data that supports greater stimulus measures from the Politburo: The export figure increased by 2.4%, the weakest growth since May. “China has relied on manufacturing and exports to drive growth, while the housing crisis, which wiped billions of dollars from household wealth, has shaken consumer confidence. “two-speed model has been maintained while global demand has remained relatively strong, but the growth of barrier trade could threaten its sustainability”, they explain from Bloomberg. The CPI also gave no respite and inflation stood at 0.4% in September, down two tenths from the previous month’s 0.6%, when analysts expected it to remain stable.
Despite all this, the announced measures are already having an effect, for the moment, on economic forecasts. Goldman Sachs improves its growth estimates for the Chinese economy for this year and next: It now expects the country’s gross domestic product to increase by 4.9% in 2024 (up from 4.7%) and by 4.7% in 2025 (four-tenths more than the previous forecast). Furthermore, the American investment bank also revised its forecasts on the country’s variable income and highlighted that the CSI 300 has an increase potential for the following months of up to 20% and they advised taking a stand. Citi also sees double-digit gains in the Chinese stock market in the following months.
Beyond the improvement in analyst forecasts, investors have already seen in this package of measures the opportunity for a return to the market. asian giant. Thus, compared to the losses of 8% that the CSI 300 recorded a month ago (when the index reached the lowest of 2019, still lower than those of Covid), the selective is now ahead of 15.5% on the year and the Hang Seng (the Hong Kong index) is positioned as the most bullish global index with a revaluation of nearly 24% in 2024. The progression of Chinese stocks is also boosting the MSCI Emerging Markets (in which China weighs up to 28%) which reaches April 2022 levels and shows increases. by a little more than 13% over the year. This increase also threatens the MSCI World, which recorded increases of just under 18% over the year.
Even as the global stock market hits all-time highs, experts are more optimistic about emerging markets in the months to come. More specifically, they hope that The MSCI Emerging Markets continues to grow by another 14%, compared to the 9% expected by the MSCI World.
Indeed, of the 10 companies that represent the most weight within the emerging selective, only one is listed without an expert background: the Chinese Meituan. The other companies still have a potential for revaluation in the coming months, which in eight cases exceeds a maximum of 10%. The upward trajectories estimated by experts for Samsung Electronics (one of the values of Eco30 Braided Walletthe investment fund advised by elEconomista.es), TSMC and Reliance, respectively 49%, 22% and 21%.
Of these ten companies, only three recorded losses on the stock market during the year, compared to profits which extend over 120% in the case of Meituan, 76% for TSMC or more than 40% for Tencent and Alibaba.
