The main indices of the Chinese stock market continue to cease activity until this Tuesday due to the celebration of Golden Week (which celebrates the birth of the People’s Republic of China) and the market already has all eyes on the asian giant waiting to see if the upward trend continues. The last time the CSI 300 index traded, on Monday, September 30, it had its best session since 2008. Today, two of the major investment banks are already reporting larger gains in the Chinese stock market .
Goldman Sachs has revised its valuations of the Chinese stock market, increasing them in light of the latest events. The American investment bank expects the CSI 300 index to continue to rise in the coming months by up to another 20% and recommends taking positions on the main index of the Asian giant.
Goldman supports this improvement based on the recovery plan announced by the country’s government to try to revive the economy and hopes that these policy measures will continue to expand. “The notes [de la bolsa china] are still below the historical average, profits can improve and the positioning of global investors remains light”, asserts the company. However, they also warn of the challenges that continue to exist in the country, such as the weaker than expected fiscal stimulus, corporate profits, the US elections (which will take place on November 5) and tariff risks.
Goldman’s optimistic view is complemented by that of Citi’s analysis team. The investment bank now puts its valuation of the CSI 300 at 4,600 points, which, above current levels, leaves the Chinese index a potential increase of 15% in the following months. “We remain optimistic that valuations of Chinese stocks remain low relative to those of emerging market stocks, even after the last three weeks of rising stock prices, and we believe that earnings forecasts for the fiscal year 25 will increase during the earnings season,” they said. explain from Citi. Furthermore, its analysts assume that the measures already announced will be added another consumer support program amounting to three trillion yuan.
The two investment banks join the growing number of experts who recommend redirecting investments toward China. Last week, they also did so from Blackrock, which explained that they were “slightly overweight” in Chinese stocks and added that “it is possible that there will be significant measures of fiscal stimulus and investors are positioning themselves even more on the Chinese market given that Chinese stocks are benefiting from a big reduction.
Less than a month ago, the CSI 300 was trading at the lowest levels of the year and its price returned to 2019 levels, even lower than those of Covid-19 itself. The announced measures revived the stock market in just nine sessions, which, from these lows, rebounded by more than 20% and entered a bull market. Now, while waiting for him to resume his activity, The index shows gains of just over 17% in 2024, becoming one of the most bullish global indices. and approaching the heavy goods vehicles of Wall Street.
