China’s push to reshape its capital markets is set to give stock valuations a significant boost, according to Goldman Sachs. UBS Group joined the chorus by upgrading its recommendations on Hong Kong-listed stocks and a benchmark of Chinese stocks for overseas investors.
Valuations for the yuan-traded stocks, also known as A shares, may expand by as much as 40 per cent if China’s market manages to close gaps with global leaders in terms of factors including dividend payouts, buy-backs, corporate governance and institutional ownership after the sweeping reforms, Goldman analysts led by Kinger Lau wrote in a note on Tuesday.
Meanwhile, UBS raised its rating on the MSCI China Index and Hong Kong stocks to overweight, citing earnings resilience and policy support.
China’s State Council, or cabinet, issued a nine-point guideline earlier this month to prop up the US$9 trillion stock market, which has been reeling from a faltering growth…
