Goldman Sachs sees Chinese stocks up 20% despite concerns over Trump tariffs By Investing.com
Investing.com– Chinese stock markets aren’t overly concerned about U.S.-China tensions right now, a Goldman Sachs equity strategist said in an interview with Bloomberg News on Tuesday, adding that stocks will post a 20% gain despite U.S. concerns over trade tariffs.
US President Donald Trump took office on Monday and said he was considering additional tariffs of around 25 percent that could be announced on February 1, but gave no other details.
“On tariffs, our base case is still that the U.S. will raise tariffs on China by about 20 percentage points this year, but the timing is very uncertain,” Kinger Lau, chief China equity strategist at Goldman Sachs, said in an interview. . with Bloomberg.
He emphasized that China should be able to digest additional tariffs this year.
There will be some positive response from the Chinese government to mitigate external headwinds, as well as an economic rebalancing from external demand to domestic demand, he said.
“So from the market’s point of view, we still see Chinese stocks growing at around 20% over the next 12 months,” Goldman Sachs’ Lau said.
In terms of earnings, excluding the impact of tariffs, Goldman Sachs expects low earnings growth for Chinese companies this year.
But after factoring tariffs of about 20% into their forecast, they expect growth of about 7%, which is slightly below consensus, Lau added.
Of the expected 20% growth, 10% is expected from multiple expansions or multiple recoveries, and about 10% from earnings.
