Goldman Sachs is bullish on Chinese stocks trading in Hong Kong
(the 'trading in Hong Kong' bit, that's the caveat)
GS cite:
- Valuations are inexpensive
- Improving economic data will prompt a rebound.
The view is from Timothy Moe, chief Asia Pacific equity strategist, speaking in an interview.
- "The snapback in China could be fairly meaningful"
- "The risk versus reward in terms of what's priced in the market gives us a sense that if we see a stabilization in macro data, say from here to the end of the year for example, then we could see a decent recovery."
- Quite low valuation levels
- "There's going to be further monetary policy easing and decent fiscal stimulus, and continuing reform."
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Note -
There are plenty of Chinese stocks listed in HK. The advantage of trading these is
1. ... Well, you can for one. Trading Chinese stocks in China is difficult, nigh on impossible for individual traders.
And, 2 ... You can also get out. On the declines we've seen in China, huge numbers of stocks have been 'suspended' from trade. And, its no secret that many sellers have been hounded by authorities. Yikes
Also note, there is a huge overhang of stocks to be sold in China (which means in HK also). A meaningful recovery (one not supported by state intervention) is going to be a long way off.
