Wall Street "touts" Chinese assets: Resistance has been digested Stocks are expected to see a major rally next year

Financial Associated Press (Shanghai, editor Huang Junzhi) news, as 2022 approaches, Goldman Sachs, Xiaomo and BlackRock and other more Wall Street banks issued reports that they are optimistic about the performance of Chinese assets next year. They believe that the shock from previous regulatory initiatives has ended and expect monetary and fiscal policy to remain accommodative next year.

Goldman Sachs Group Inc. said that while Chinese stocks had been hit hard before, some of them had plummeted too much, thus providing an opportunity to buy because most of the headwinds facing the Chinese economy were now digested.

Goldman Sachs strategists, led by Christian Mueller-Glissmann, wrote in a new report released Monday that "while risks remain around China's economic growth prospects, most of the headwinds have been priced and undervaluation is making Chinese stocks more attractive." ”

Luke Barrs, head of portfolio management for fundamental equity clients at Goldman Sachs EMEA, said in an interview last week, "We still see a lot of opportunities, and the basic idea is that There is room for successful, profitable private companies in China." The P/E ratio you're paying now is almost at the lowest level compared to history, so this feels like a good entry point. ”

Their views are also in line with those of JPMorgan Chase & Co.' strategists. JPMorgan chasers upgraded the rating of Chinese stocks this week, saying they expected a "significant" rally in Chinese stocks next year.

The bank also expects China's policies to be looser next year, and the stock risk premium from regulatory measures has been priced out. Against the backdrop of extreme optimism about the U.S. stock market and the stock market as a whole next year, the bank particularly believes that the Chinese economy will be more resilient in 2022.

In addition, the think tank of BlackRock, the world's largest asset management institution, also released the "Global Investment Outlook Report 2022" on Monday, stressing that it expects China to relax monetary and fiscal policies, and regulation will continue but will not increase, thereby maintaining a moderate tactical overweight view of Chinese stocks.

BlackRock believes that the low starting point for global investors in China's asset allocation is inconsistent with the growing weight of the Chinese economy in the world. In addition to maintaining a tactical small overweight stance on Chinese equities, the report favors high-yielding and relatively stable government bonds. The report maintains a long-term overweight in Chinese assets and believes that the current valuation of Chinese equities is attractive enough.

Late last month, BlackRock also said it was more optimistic about Chinese stocks because of attractive valuations. Belinda Boa, BlackRock's head of active investment for Asia Pacific, said, "Valuation is now key. Compared to India's performance this year, we are starting to profit in Chinese equities and are more optimistic about Chinese growth stocks. ”

BlackRock has realigned its Asia-focused portfolio, shifting its positions in Chinese equities from a reduction to a tactical small increase and narrowing expectations for an Internet services company reduction.

"The time to build a position in the Chinese market is now," said Lucy Liu, blackRock's global emerging market equity portfolio manager, adding that economic growth could unexpectedly show an upward trend as the Internet and real estate sectors show signs of a "bottoming out."