Goldman Sachs from earlier this week (Bloomberg TV interview) on Chinese equities. Analysts at GS say stocks in China are supported on a dip in price next year. Chinese stocks face limited downside in 2025. GS cite:
- market has factored in trade tension risks already
- domestic stimulus measures offer a buffer against any further selloff
- market participants expect more concrete measures to boost consumption
- equity valuations have come off their October peak
- potentially improving fundamentals for companies
- GS forecasts 7% earnings growth for the MSCI China gauge in 2025, and 10% in 2026
- 60% US tariff hike on Chinese goods is unlikely, but if so 10% valuation downside from the current level
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We’ve just had some announcements from China’s Ministry of Finance on further stimulus measures ahead (nothing specific yet):
Reuters collated the headlines more broadly:
- China will step up fiscal spending and accelerate the pace of spending in 2025, according to the Finance Ministry.
- Fiscal spending will focus more on improving people’s livelihood and boosting consumption, the Finance Ministry stated.
- The government will arrange for larger-scale issuance of government bonds to provide additional support for stabilizing growth, the Finance Ministry reported.
- Efforts will be made to fend off risks in key areas, said the Finance Ministry.
- The government will further increase transfer payments to local governments to strengthen their financial capacity, according to the Finance Ministry.
- China will support the expansion of domestic demand, said the Finance Ministry.
- The Finance Ministry announced plans to appropriately increase the basic pensions for retirees and raise the basic pensions for urban and rural residents.
- Support will be provided for building a modern industrial system in 2025, with full efforts directed toward achieving breakthroughs in core technologies, the Finance Ministry stated.
- The government will actively expand effective investment, reasonably arrange bond issuance, and use government investment to drive more social investment, the Finance Ministry said.
- Efforts will be made to resolutely prevent issues such as arbitrary charges, fines, and unreasonable distribution of costs, according to the Finance Ministry.
- Tariff policies will be improved, and cooperation with ‚Belt and Road‘ countries will be deepened, the Finance Ministry reported.
- China will comprehensively deepen fiscal and tax system reforms and effectively prevent and resolve local government debt risks, the Finance Ministry stated.
This article was written by Eamonn Sheridan at www.forexlive.com.