“China looks well positioned across the growth, policy, and inflation cycles in a global context in 2023,” Lau’s team wrote. “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.”
Goldman Sachs Group Inc. said Chinese stocks may rally another 15%, while the yuan is seen hitting levels last seen in April on the nation’s reopening and several key policy shifts.
The brokerage raised its 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, strategists including Kinger Lau wrote in a note dated Monday. Separately, Goldman said it sees the yuan rallying to 6.5 per dollar by year-end versus its previous estimate of 6.9 on reopening optimism, currency strategists led by Kamakshya Trivedi wrote in a Jan 6 note.
