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“in addition to the stable implementation of existing policies, it is important to further launch new policies and continue to effectively send positive signals.”

stimulated by macro policies, a-shares surged in volume before the holidays, and foreign institutions are adjusting their allocation strategies for chinese assets.

in its latest research report on october 7, goldman sachs adjusted hong kong stocks to overweight, shifted its strategic preference from hong kong stocks to a-shares, and upgraded the insurance theme to overweight. a few days ago, on october 5, eastern time, goldman sachs announced that it had raised the chinese stock market to overweight and raised the target prices of the msci china and csi 300 indexes; in terms of industry allocation, it added insurance, securities firms, exchanges and other financials was upgraded to overweight, and overweights on internet and entertainment, technology hardware, and semiconductors were maintained.

regarding the market outlook, goldman sachs predicts that the chinese stock market still has the potential to rise further, with an expected increase of 15% to 20%. however, he also mentioned that there is currently not enough information to conclude that a structural bull market has begun. the chinese market still faces great macro challenges in real estate, demographic structure, debt levels, etc., and details such as the scale of fiscal policy have not yet been announced.

just recently, ubs also announced an increase in the target price of the msci china index, tactically adjusting it from h shares to a shares. landlord, china head of ubs global financial markets, said that driven by recent strong policy signals, market expectations have changed relatively clearly, and investor confidence has also recovered significantly.

the implementation of macro policies, whether they will be further strengthened, and the fiscal efforts have become the focus of foreign investment. landlord ming believes that the next key is to follow up on fundamentals. in addition to the stable implementation of existing policies, it is important to further launch new policies and continue to effectively deliver positive signals.

foreign capital continues to be bullish

goldman sachs said in a report that the chinese market is changing the "rules of the game" and that coordinated and strong policies have triggered a sharp rebound in the stock market.

for the recent rise in china's stock market, goldman sachs believes that it is driven by two major factors: decisive policy measures as a catalyst, and an oversold, undervalued and under-positioned market background as a starting condition.

"these policies are in sharp contrast to the sporadic and moderate easing measures in the past few years, and are expected to together constitute a larger-scale policy stimulus." goldman sachs predicts.

"this (a-share) rebound may have more support." the equity strategy team of goldman sachs research department believes that if subsequent policy commitments and benefits are fulfilled, this rebound is expected to last longer.

just recently, goldman sachs adjusted its allocation to the chinese market. specifically, based on factors such as valuation, profitability, and positioning, the bank raised the target price of msci china from us$66 to us$84, and the target price of the csi 300 index from 4,000 points to 4,600 points. from current levels, there is room for about 15% to 18% upside in total returns.

in terms of industry allocation, goldman sachs adjusted insurance and other financial companies (such as brokers, exchanges, investment companies) to overweight, upgraded metals and mining to equal weight, and lowered telecommunications services to underweight. in addition, goldman sachs maintains its overweight position on several major industries, including internet and entertainment, technology hardware and semiconductors, consumer goods retail and services, and daily necessities.

at the end of september, ubs also announced adjustments to its allocation of chinese assets. specifically: raise the year-end target price of the msci china index to $70, continue to adopt the barbell strategy, but replace some defensive stocks with selected small consumer stocks.

pay attention to policy increase expectations

a-shares are about to open after the holiday. how do foreign investors view the market outlook?

goldman sachs believes that there is still the possibility of further rises in china's stock market. based on data calculations, the current rebound has brought msci china's forward price-to-earnings ratio to 11.3 times. with policy support, the valuation may expand to 12 times.

however, goldman sachs also mentioned that if subsequent fiscal support is implemented in areas such as consumption, bank recapitalization and local government refinancing, this may further support the domestic economy.

ubs believes that looking forward to the market outlook, usually after a 20% rebound from the bottom, there will be a certain degree of long and short stalemate, some will take profits, and there will also be sector rotation.

landlord ming analyzed that at the end of september, the three major financial management departments and the politburo meeting released a series of favorable policies, both in form and content, exceeding market expectations, and the market also responded with positive feedback.

"generally speaking, this marks a clear turning point for the entire china a-share market." he mentioned.

landlord ming further mentioned that for the market, in addition to the stable implementation of existing policies, it is important to further launch new policies and continue to effectively convey positive signals. he looks forward to the follow-up of fiscal policies and the substantive impact on private enterprises and entrepreneurs. support and care.

regarding macro policies, ubs believes that it is necessary to further increase policy support.

"after the introduction of this round of policies, we believe that it is still necessary to further increase policies in the next few months to ease the downward pressure on the real estate market and stabilize economic growth." wang tao, head of asia economic research and chief china economist at ubs, said that in order to promote significant progress has been made in real estate destocking, and the government and central bank need to significantly increase financial support and reduce capital costs. at the same time, it is necessary to speed up the pace of government bond issuance and fund allocation, and support local governments by relaxing local implicit debt control to a certain extent.

hopes are placed on financial efforts. wang zonghao, head of china equity strategy research at ubs, mentioned that the key factor to pay attention to later is the scale and type of fiscal measures.

nie yixiang, co-investment director and fund manager of fidelity fund (china), believes that in general, monetary policy has exceeded market expectations, real estate policy has basically been in line with market expectations, and the liquidity support for the market has exceeded expectations.

"the monetary policy has exceeded expectations. whether the subsequent market performance can be sustained depends on whether the fiscal policy can be synchronized." he analyzed that if the overall profitability of enterprises cannot be improved, after interest rates fall further, the asset shortage will likely intensify and the stability will be high. large-cap stocks with dividends and high liquidity will have more investment and allocation value.

nie yixiang also mentioned that before further efforts are seen on the financial side, he will continue to be optimistic about high-dividend stocks and high-liquidity stocks in the market; he will continue to be cautious about the consumption and real estate sectors. looking forward to the market outlook, we look forward to the follow-up fiscal policy and the politburo meeting at the end of the year to set a positive tone for next year's economy.

zhao yaoting, global market strategist for invesco asia pacific (excluding japan), said it is expected that more fiscal support is likely to be forthcoming, which may help boost the economy and promote economic recovery. he also mentioned that government spending is likely to increase during the rest of this year.