FXStreet (Mumbai) – China’s biggest stock-market rout since 1992 has done nothing to erode the bullish outlook of Goldman Sachs.
Kinger Lau, the bank’s China strategist in Hong Kong, predicts the large-cap CSI 300 Index will rally 27 percent from Tuesday’s close over the next 12 months as government support measures boost investor confidence and monetary easing spurs economic growth.
Goldman Sachs is sticking with its optimistic forecast in the face of record foreign outflows, the biggest-ever selloff by Chinese margin traders and a chorus of bubble warnings from international peers.
Lau notes, “It’s not in a bubble yet, China’s government has a lot of tools to support the market.”
He further added, “Re-rating is not over for China’s stock market,” We are still positive.”
Lau has been forecasting gains in Chinese shares for much of the past year, a stance that paid off as the CSI 300 surged to a seven-year high last month.
(Market News Provided by FXstreet)