Goldman Sachs on China's currency and stock markets:
Chinese stocks may rally another 15%
- 12-month index target for the MSCI China Index to 80 from 70
- citing low valuations and multiple policy pivots in areas like housing, internet regulation and geopolitics
- expects further earnings upside for the nation’s internet sector given a faster-than-expected reopening, macro recovery and normalizing of regulations
USD/yuan seen rising to 6.5 by the end of 2023
From the report:
- “China looks well positioned across the growth, policy, and inflation cycles in a global context in 2023”
- “The prevailing market backdrop leads us to believe that the downside risk of maintaining underweight or shorting Chinese stocks is meaningfully higher than going long”
