U.S. investment bank Goldman Sachs (GS) forecasts that Chinese stocks will increase in value by as much as 24% this year, fueled by the country’s recovery from COVID-19.
The bank said in a note to clients that Chinese stocks entered bull market territory around the Lunar New Year, with the MSCI China index peaking at the end of January and up nearly 60% from lows seen last October.
The MSCI China index tracks more than 700 Chinese stocks listed globally.
Goldman Sachs said that it expects China’s economy to grow by 5.5% in 2023, powered by second and third quarter growth that it now puts at 9% and 7%, respectively.
The strategists added that professional speculators are showing a greater risk appetite for Chinese stocks.
“Hedge fund investors have substantially re-risked in Chinese stocks,” wrote Goldman Sachs.
Many Chinese stocks, including tech giants such as Alibaba (BABA) and Baidu (BIDU), have risen more than 10% so far this year.
Goldman Sachs’ own stock is up 7% over the last 12 months and trading at $368.50 U.S. per share.
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