The recent stimulus-triggered rally in Chinese stocks could have legs, said Goldman Sachs, whose strategists upgraded the regional equities and projected high double-digit returns. The Wall Street firm hiked its rating on Chinese stocks to overweight from equal weight and raised its 12-month price target on the MSCI China index to 84, implying an upside between 15% and 18%.
mountain iShares MSCI China ETF Still, Goldman said its upgrade is a tactical one, meaning a sustainable rally would require continuing evidence of implementation and progress in addressing macro challenges in China. In terms of sector allocations, Goldman raised its rating on Chinese insurance and other financial stocks to overweight due to increased capital market activities and better asset performance.