FINMAX - Analytics

    FINMAX

    232.25 8.25/10
    100% of positive reviews
    Real

    Chinese shares still attractive for Goldman Sachs

    Goldman Sachs Asset Management ignores trade wars threats and potential negative impact on Chinese exporters. The investment bank is extremely optimistic about Chinese equities and shares for some of the export-oriented corporations. The bank’s analysts suggest that the trade deal between the two largest world’s economies will be arranged shortly, and China’s stock indices will soar in the nearest future. That was the background for the company to increase investments in the Chinese real sector, enlarging the part of the portfolio. At the same time, recent market turbulence made shares more attractive as prices dropped on concerns about the economic slowdown and negative impact from Trump’s tariffs. Goldman Sachs department, which works with assets worth 1.4 trillion dollars, went long on Chinese shares, according to executive officer David Cospi. 

    One of the main arguments was that any conflicts must have reasons to come back to negotiations and talks, as both countries suffer from possible escalation. Trumps’ import tariffs are significant, but the overall economic growth should not suffer, and global order should remain the same. Of course, the United States is the largest market for Chinese exporters, having a significant share in the total revenue, however, the country has exported to many countries and regions, while a shift towards other directions might affect the growth. 

    Robeco Investment Group is also interested in the buy-lows trading strategy despite a massive drop in the capitalisation of Chinese export-oriented companies recently. The decline exceeded 2.6 trillion dollars in the last week, hitting exporters the hardest. Nonetheless, China remains the second largest world’s economy, internal consumption is constantly growing, while other emerging markets and developing countries follow China but not the U.S. China Government's supportive measures, low inflationary pressure and high level of liquidity for Chinese exporters could support the growth and shares prices might recover much faster than some pessimists were predicting. Developing markets usually have much higher yields than, for example, in the United States and some investment institutions are ready to risk


    To leave a comment you must or Join us


    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree