HONG KONG (Reuters) -Global investment houses are increasingly bullish about Chinese stocks as resilient corporate earnings, policies to support the economy and enhance shareholder returns, boosted sentiment

China's top securities regulator issued draft rules in April aimed at bolstering the ailing stock market, including strengthening the supervision of company listings, improving corporate governance, encouraging dividend payouts, and fostering long-term investment.

The country's blue chip index has risen 5% year-to-date, and has bounced more than 10% from the trough on February 2. Hong Kong's Hang Seng Index has jumped 8% year-to-date with a 7.4% gain in April alone.

MSCI China, which tracks both onshore and offshore Chinese stocks, has also rallied 7% so far this year.

Here is a summary of some house views on China stocks:



UBS Upgrades China and Hong

Kong stocks to overweight

Goldman Expects an up to 20%

Sachs upside in China A-shares

May 2024

BofA Says China

Securities stocks have bottomed out


BofA Securities:

"The flow of selling in January turned into flow of buying in April, and other market chatters fuelling the rally include a potential quantitative easing by the PBOC, property easing from the April Politburo meeting, overseas Chinese re-allocating assets back to HK, etc."

"We believe the worst of China market, in terms of fund outflow and multiple de-rating, should be behind us, at least for 2024."


"The largest stocks in the China index have been generally fine on earnings/fundamentals. So China underperformance is purely due to valuation collapse."

"What makes us more positive now on earnings are the early signs of pick up in consumption - as seen through robust festive holiday spending numbers year-to-date, listed consumer stocks performing better than general consumption in the economy."

Goldman Sachs

"We triangulate the potential policy-driven upside through the lens of shareholder returns, corporate governance standards, and institutional investor ownership."

"Our analysis suggests that A-shares could rise 20% if they could narrow the gaps with international averages along these dimensions, and could re-rate as much as 40% if they catch up with global leaders in our blue-sky scenario."


Investment banks expect the yuan to hit a trough of about 7.3 per dollar in coming months, before recouping some of the loss to 7.19 at the end of this year.

The Chinese currency has lost 2% to the dollar so far this year, but its value against its major trading partners, as measured by the CFETS index, has risen 3% to 100.4, according to Reuters calculations based on the official data.

Here is a summary of some forecasts for the Chinese currency:

INVESTMENT HOUSE end-Q2 end-Q3 end-2024

7.3 7.25 7.2

GOLDMAN SACHS (in 3-month (6-month) (12-month)


7.3 7





RBC 7.26 7.3 7.25


BOFA 7.35 7.45 7.45

UBS 7.1-7.2

SEB 7.1

ING 7.25 7.18 7.12

(Reporting by Summer Zhen and Winni Zhou; Editing by Michael Perry and Sharon Singleton)