According to HSBC, China’s reopening following weeks of lockdowns in big cities is “enticing” for investors. Goldman Sachs, however, has identified a number of stocks that it believes have attractive valuations. Following weeks of lockdowns and strict restrictions, Shanghai as well Beijing have begun to loosen their Covid restrictions. This opening-up — combined with soaring government investment and plummeting stock valuations — are creating investment opportunities, the banks say. Goldman Sachs identified several stocks that could trade in a “turbulent Asian market” and provided a list of names to be benefited by government investment. China’s President Xi Jinping demanded an “all out” effort to build infrastructure, such as rail, roads and waterways, in April. Goldman listed Chinasoft International and smartphone manufacturer Xiaomi in its “Select China New Infra” stock basket. Goldman also selected Xinyi Solar, AAC acoustics and China Telecom telco giant China Telecom. Global climate change initiative (Chinese govt) can help stock that have exposure to the environment or are in China’s “new infra” industries. support on emerging industries & technologies,” the analysts, led by Alvin So, wrote. Meanwhile, Goldman’s “Environmental & Renewables” basket of stocks included wind power company China Longyuan Power , lithium producer Ganfeng Lithium , utilities company Beijing Enterprises Water and Canadian Solar , a renewables firm that operates in mainland China and trades on the Nasdaq. China Everbright, an energy investor company was also listed. The analysts said that both the baskets’ valuations had declined meaningfully in the last year. This has resulted in attractive entry points. HSBC’s stock picks Amit Shrivastava’s research notes on June 9 stated that China reopening was driven by “all-out infrastructure pushes and the return to investment led growth.” HSBC focused on global stocks with positive exposure to China, picking 22 names including consumer goods company Reckitt Benckiser , chocolate-maker Lindt & Spruengli , engineering company Kone and pharmaceuticals firm Novo Nordisk . The bank also picked Logitech, a computer hardware company, and Belimo, a heating equipment manufacturer. The stocks all have a “relatively good and positive sensitivity”. [the]The analysts stated that the Chinese business environment is favorable and has a track record of outperformance in times when business sentiment is improving. HSBC said that market sentiment toward Chinese stocks was “above-average” and is moving towards the long term mean. This report was co-authored by Evelyn Cheng of CNBC.
On June 8, 2022 there was heavy traffic in Shanghai (China) as workers returned to work following Covid lockdowns.
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China’s reopeningAccording to a report, investors are “enticed” by weeks of lockdowns in big cities after weeks. HSBCWhile Goldman SachsA number of stocks have been identified by the company as having attractive valuations.
