Bocom outguns Wall Street forecasters on Chinese stocks with ‘playing offense’ call for 35 per cent upside next year
Chinese stocks are set to deliver the biggest payback for investors in six years, and “playing offense” is the way to go to capture the impending market rally, according to the $BOCOM INTL(03329.HK$.
The MSCI China Index, which tracks 797 companies listed at home and abroad, will climb by 26.8 per cent to 34.9 per cent in 2023 as economic growth accelerates after a wider reopening of the economy, the bank predicts. A 13 to 17 per cent expansion in corporate earnings will support higher market valuations, it added.
“2023 will be a year of reversal and recovery for the Chinese market,” said Carl Cai, a macro strategist based in Hong Kong at Bocom, as the nation’s fifth biggest banking group is known. Stronger fundamentals and liquidity conditions will make Chinese equities “the top choice” for allocation next year, he added.
Bocom’s 2023 picks include on-demand delivery platform operator $MEITUAN-W(03690.HK$, liquor distiller and distributor $CHINA RES BEER(00291.HK$ , biotech firm $WUXI BIO(02269.HK$ and electric-car maker $BYD COMPANY(01211.HK$ .
If Bocom is right, the index will end the year with the best performance since a 54 per cent surge in 2017, according to data published by the New York-based index compiler.
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HopelessChi : the index been beaten down so badly and the upside from bottom is merely this much? the amount of bagholder since 2020 era remains a bagholder for investing in china equities?