NEW YORK - Major financial institutions Goldman Sachs (NYSE:GS) and UBS have expressed optimism for China's economic prospects in 2024, with expectations of significant growth in the country's major indices and real GDP. At a media conference Today, Goldman Sachs' chief China equity strategist Liu Jinjin announced projections of a 12% rise in the MSCI China Index and a 16% increase in the CSI 300 Index for the upcoming year. Liu highlighted the attractive valuations of China's A-shares, encouraging an overweight position on these domestic stocks while downgrading offshore-listed Chinese equities.
The bullish sentiment is fueled by signs of stable consumer behavior, increased government support, and higher investments across various sectors such as real estate, infrastructure, and manufacturing. Goldman Sachs' chief China economist Shan Hui also provided a robust GDP growth forecast of 4.8% for China in 2024, outpacing the International Monetary Fund's (IMF) prediction of 4.6%. This positive outlook is further bolstered by anticipated profitability growth in China's internet sector by 13%, attributed to cost optimization and monetization improvements.
UBS shares a similarly positive view, predicting a 4.4% real GDP growth for China in 2024, with Wang Tao from UBS forecasting a 5% increase in residents' real income as the consumption and service sector continues its recovery.
Fidelity International's Marty Dropkin pointed out the appeal of China's A-share market to international investors due to its long-term potential and opportunities in specific stocks and industries such as new infrastructure, renewable energy, electric vehicle supply chains, and mass-market consumption.
Meng Qiao from Fidelity emphasized the maturation of the Chinese market, noting that despite being the world's second-largest economy, A-shares represent less than 3% of global asset allocation indexes. This suggests considerable room for growth as China continues to broaden its financial market reforms to attract more long-term funds.
The positive projections come at a time when China is looking to expand its financial markets and attract international investors by offering attractive opportunities in various sectors including technology, media, telecommunications (TMT), and mass-market consumption.
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