Latest news with #MSCIChina
Yahoo
26-05-2025
- Business
- Yahoo
Goldman Sachs Expects Stronger Yuan to Boost Chinese Stocks
(Bloomberg) -- Chinese stocks are expected to benefit from further gains in the yuan, which has been showing resilience amid the country's trade spat with the US, according to strategists at Goldman Sachs Group Inc. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Every 1% appreciation of the yuan versus the dollar can boost Chinese equities by 3% thanks to factors including improved corporate earnings outlook and stronger foreign inflows, strategists including Kinger Lau wrote in a note Monday. Earlier this month, the bank raised its 12-month forecast for the yuan to 7 per dollar, from 7.35. 'Chinese stocks tend to perform well when the currency rises,' Lau and his colleagues wrote. The outlook for the currency lends support to their 'overweight stance' on Chinese stocks, the strategists said, adding that consumer discretionary, property and broker stocks typically outperform under a strengthening yuan. The MSCI China Index has recouped its losses since President Donald Trump's April 2 tariff offensive, with a three-month trade truce with the US helping the market's rebound. Chinese assets overall have benefited from a diversification away from US markets as concerns about Trump's tariffs and tax cuts sustain the 'sell America' narrative. While investors continue to doubt the allure of US stocks and the dollar, the People's Bank of China has sought to keep the yuan stable and add support to the economy via interest-rate cuts. Read: Dollar Falls to Lowest Since 2023 as Tariff Jitters Return Market volatility from tariff uncertainties has caused Goldman strategists to revise their targets for Chinese stocks with notable frequency. They reduced their MSCI China projection twice in April, before raising it back in May as the US and China agreed to temporarily roll back tariffs. The MSCI gauge and the Hang Seng China Enterprises Index fell more than 1% each on Monday. That's after capping six straight weeks of gains. The onshore yuan has gained around 1.4% versus the greenback in May, and reached 7.1674 on Monday, its strongest level since November. On Monday, the PBOC strengthened the yuan's reference rate by the most since January amid the greenback's extended slide. The official fixing of 7.1833 per dollar was still weaker than the yuan's spot price, suggesting China is managing volatility and seeking to avoid a sharp appreciation like that seen in the Taiwanese dollar. The yuan closed on Friday at a level that was stronger than the day's fixing for the first time since November. --With assistance from John Cheng and Tian Chen. (Updates with Goldman's MSCI China target changes and yuan chart from 6th paragraph.) Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P.
Yahoo
26-05-2025
- Business
- Yahoo
Goldman Sachs Expects Stronger Yuan to Boost Chinese Stocks
(Bloomberg) -- Chinese stocks are expected to benefit from further gains in the yuan, which has been showing resilience amid the country's trade spat with the US, according to strategists at Goldman Sachs Group Inc. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Every 1% appreciation of the yuan versus the dollar can boost Chinese equities by 3% thanks to factors including improved corporate earnings outlook and stronger foreign inflows, strategists including Kinger Lau wrote in a note Monday. Earlier this month, the bank raised its 12-month forecast for the yuan to 7 per dollar, from 7.35. 'Chinese stocks tend to perform well when the currency rises,' Lau and his colleagues wrote. The outlook for the currency lends support to their 'overweight stance' on Chinese stocks, the strategists said, adding that consumer discretionary, property and broker stocks typically outperform under a strengthening yuan. The MSCI China Index has recouped its losses since President Donald Trump's April 2 tariff offensive, with a three-month trade truce with the US helping the market's rebound. Chinese assets overall have benefited from a diversification away from US markets as concerns about Trump's tariffs and tax cuts sustain the 'sell America' narrative. While investors continue to doubt the allure of US stocks and the dollar, the People's Bank of China has sought to keep the yuan stable and add support to the economy via interest-rate cuts. Read: Dollar Falls to Lowest Since 2023 as Tariff Jitters Return Market volatility from tariff uncertainties has caused Goldman strategists to revise their targets for Chinese stocks with notable frequency. They reduced their MSCI China projection twice in April, before raising it back in May as the US and China agreed to temporarily roll back tariffs. The MSCI gauge and the Hang Seng China Enterprises Index fell more than 1% each on Monday. That's after capping six straight weeks of gains. The onshore yuan has gained around 1.4% versus the greenback in May, and reached 7.1674 on Monday, its strongest level since November. On Monday, the PBOC strengthened the yuan's reference rate by the most since January amid the greenback's extended slide. The official fixing of 7.1833 per dollar was still weaker than the yuan's spot price, suggesting China is managing volatility and seeking to avoid a sharp appreciation like that seen in the Taiwanese dollar. The yuan closed on Friday at a level that was stronger than the day's fixing for the first time since November. --With assistance from John Cheng and Tian Chen. (Updates with Goldman's MSCI China target changes and yuan chart from 6th paragraph.) Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P.
South China Morning Post
21-05-2025
- Business
- South China Morning Post
JPMorgan prefers Hong Kong stocks to A shares with 18% best-case upside prospects
Chinese stocks listed in Hong Kong are likely to outperform their yuan-denominated peers on onshore stock exchanges because of valuation advantages and buying support from mainland-based investors, according to JPMorgan Chase. Advertisement Stocks in the Hang Seng Index currently trade at about 11.2 times their earnings, compared with a more expensive 15.2 times for peers in the mainland's benchmark CSI 300 Index, according to Bloomberg data. The Hong Kong stock benchmark has risen 19 per cent this year, while the CSI 300 has stagnated. 'A shares are a bit weaker in terms of corporate earnings and the valuations are also relatively higher than Hong Kong stocks,' Wendy Liu, a China equity strategist at JPMorgan, said at a media briefing in Shanghai on Wednesday. 'Mainland investors also like to buy quality growth stocks in Hong Kong.' Mainland-listed companies suffered a 14 per cent annualised drop in earnings in the fourth quarter, compared with an 11 per cent gain enjoyed by members of the Hang Seng Index, according to data compiled by UBS and Bloomberg. 01:44 China's largest EV battery maker CATL celebrates strong debut at Hong Kong stock market China's largest EV battery maker CATL celebrates strong debut at Hong Kong stock market JPMorgan forecasts the MSCI China Index – the broadest gauge tracking more than 700 Chinese stocks listed at home and abroad – to climb 6.3 per cent by the of the year in base-case scenario, and by as much as 18 per cent in best-case outcome, from its closing level on Tuesday. The CSI 300 Index of onshore blue-chip stocks may advance 6 per cent by December, it added. Advertisement
Yahoo
14-04-2025
- Business
- Yahoo
Goldman Cuts Targets on China Stocks for Second Time This Month
(Bloomberg) -- Strategists at Goldman Sachs Group Inc. cut their targets for key Chinese stock indexes for a second time this month, citing heightened trade tensions with the US. The Secret Formula for Faster Trains NYC Tourist Helicopter Crashes in Hudson River, Killing Six Even Oslo Has an Air Quality Problem Inside the Quiet, Extravagant Expansion of the Frick Collection Lisbon Mayor Wants Companies to Help Fix City's Housing Shortage 'US-China trade tensions have soared to unprecedented levels, prompting concerns about global recession, and decoupling risks between the two largest economies globally in other strategic cohorts, notably capital markets, technology, and geopolitics,' a team led by Kinger Lau wrote in a note Monday. The 12-month target for the MSCI China Index was cut to 75 from 81, while that for the CSI 300 Index was lowered to 4,300 from 4,500. The new targets imply potential upsides of 12% and 15% respectively from closing levels on Friday. Chinese stocks have taken a hit amid the escalating trade war between the world's two largest economies, with Beijing's latest retaliatory 125% levies on the US following President Donald Trump's 145% tariffs on China. Concerns over a further escalation of trade tensions continue to weigh on investor sentiment. The MSCI China Index rose as much as 2.6% Monday, as investors enjoyed some respite after the US announced a pause in tariffs for phones, computers and consumer electronics. The CSI 300 Index gained 0.2%. Goldman Sachs has long been bullish, often going against the tide during the market's multiyear slump. Lau lifted the target for the MSCI China in February to 85 from 75, expecting the emergence of DeepSeek to drive the rally in Chinese equities further. However, the index has fallen more than 8% since then as Trump threatened further tariffs on China. The Goldman team trimmed its target to 81 on April 6, soon after Trump's April 2 tariffs kicked in. The strategists favor A shares over H tactically, and upgraded banks and developers to overweight, as they expect 'decisive and forceful' policy changes to soften the trade shock. The Beauty Salon Recession Indicator Trump Is Firing the Wrong People, on Purpose World Travelers Are Rethinking Vacation Plans to the US How One MBA Grad Blew the Whistle on a $2 Billion Deal Cheap Consumer Goods Are the American Dream, Actually ©2025 Bloomberg L.P. Sign in to access your portfolio
Globe and Mail
29-03-2025
- Business
- Globe and Mail
Riding China's Economic Rebound: ETFs in Focus
By the end of 2024, U.S. and Chinese equities—tracked by the MSCI USA and MSCI China indices—ended up with fairly similar returns. But how they got there couldn't have been more different. So far in 2025, their paths have diverged even further: the MSCI China Index is up nearly 20%, while the MSCI USA Index has slipped into negative territory. China's Economic Repositioning While the Trump administration's trade policies are having a major impact on global equity markets, responses from national and regional governments are also shaping the landscape. In China's case, after a strong fourth quarter in 2024 —when GDP grew 5.4% year-over-year—the government laid out its 2025 economic goals. These include a more proactive fiscal policy, a supportive monetary stance, and a focus on boosting domestic consumption and driving high-quality growth through innovation. The emphasis on domestic consumption stands out, especially given the current tariff environment, which is slowing Chinese exports—a sector that accounted for nearly a third of the country's growth last year. To encourage consumer spending, the Chinese government plans to support ' reasonable growth ' in wages, explore a system for adjusting the minimum wage, consider childcare subsidies, and ramp up investment in areas that directly support consumption. Is it time to invest in Chinese equities again? Leading Chinese equities have seen strong gains this year, driven in part by recent economic policy announcements from the Chinese government. As the chart below shows, companies like Xiaomi, Alibaba, and BYD have outpaced many of their peers in 2025. Still, challenges remain. China continues to grapple with real estate sector debt, which is weighing on household confidence and the broader economy. On top of that, any escalation in U.S.-China trade tensions—especially under Trump's renewed 'America First' stance—could pose serious risks to Chinese businesses. As the world's second-largest economy, China plays a vital role in the global economy. With Trump's 'America First' policies causing economic reverberations across the globe, it could open the door for renewed economic cooperation among countries, creating avenues for growth. Investing in China via ETFs For Canadian investors seeking exposure to Chinese equities, the iShares China Index ETF (Ticker: XCH) and the BMO MSCI China ESG Leaders Equity Index ETF (Ticker: ZCH) provide exposure to the region. XCH tracks the FTSE China 50 Index, which comprises the 50 largest and most liquid Chinese stocks, while ZCH tracks the MSCI China ESG Leaders Index, which reflects the performance of securities that have been assigned higher ESG ratings by MSCI relative to their peers and targets 50% of the market capitalization within each sector. The Index excludes securities of companies that earn significant revenues from tobacco, alcohol, gambling, conventional weapons and civilian firearms, any controversial weapons, significant generation of nuclear power as well as companies involved in severe business controversies. As of February 28th, 2025, XCH's year-to-date return has been 15.90%. XCH's primary holding is the iShares China Large-Cap ETF (Ticker: FXI), whose top holdings include Tencent, Alibaba, and Meituan. For ZCH, the year-to-date performance as of February 28th, 2025 is 19.44%, whose top holdings include Tencent, Alibaba, and China Construction Bank Corp. Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
