23 trillion retail investors' ammunition loaded! Goldman Sachs Asia executive says: This A-share rally can still "soar"
On September 3, against the backdrop of a warming trend in capital inflows, the head of Goldman Sachs Asia expressed optimism about the Chinese stock market and revealed that the group is planning to expand its teams in Hong Kong and India.
Kevin Sneader, President of Goldman Sachs Asia Pacific (excluding Japan), said in an interview on Wednesday: "From our communications with clients and investors, we can sense that market sentiment toward Chinese stocks has improved. Although China still faces many challenges, the current rally in the stock market has sustainable momentum."
Despite a still-weak economic backdrop, Chinese stocks have shown a strong rebound. Since the end of July, the benchmark CSI 300 Index has risen by about 10%, while the MSCI World Index has only increased by 1.6% over the same period. China's technological breakthroughs in artificial intelligence (AI) and proactive measures to address overcapacity have restored market confidence in economic recovery, becoming important drivers of the stock market's rise.
Last week, the Goldman Sachs strategy team led by Kinger Lau raised the year-end target for the CSI 300 Index. They pointed out that attractive valuations, the prospect of high single-digit corporate earnings growth, increased participation from retail investors, and potential asset reallocation trends are the core factors supporting this judgment.
Sneader mentioned that in January this year, clients were still waiting to see whether the Chinese government would launch large-scale stimulus policies. In Wednesday's interview, he further stated that although long-term investors are still looking for clearer policy signals, capital inflows from hedge funds into the Chinese market have already improved. In addition, he added that the excess savings held by Chinese retail investors remain an "important driving force" behind the current stock market rally.
Currently, Chinese retail investors hold as much as $23 trillion in cash. This massive capital reserve has raised market expectations that it could inject even more momentum into the continued strong rise of the stock market.
On the other hand, Sneader revealed that Goldman Sachs is planning to expand its team in India, with recruitment focusing on the newly established Mumbai office, as well as Hyderabad and Bangalore. He stated that the recruitment drive at the Hong Kong office is mainly due to the strong trading and project pipeline in the local market.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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