Two major positive news are coming! Goldman Sachs sings long Asian stock markets: Reiterates increasing holdings in China, Japan and South Korea, and raises Hong Kong stock ratings

Source: Wall Street News

Goldman Sachs raised its outlook for Asian stock markets, believing that the increased certainty of tariff policies and the loose monetary environment will bring good benefits to the regional stock markets. The bank raised the Hong Kong stock rating from low-level to standard, and expected that the weakening of the US dollar brought about by the Federal Reserve's interest rate cut cycle will benefit markets such as Hong Kong stocks.

On July 11, Goldman Sachs strategists said in their latest research report that it raised the MSCI Asia-Pacific Ex-Japanese Index 12-month target price by 3% to 700 points, and the dollar-denominated return rate is expected to reach 9%.

The bank believes that a more favorable macro environment and enhanced certainty in tariff policies are the main factors driving this upward adjustment.

A team of strategists led by Timothy Moe pointed out in the research report that even if the tariff rate may be slightly higher than the current benchmark expectations, the negative impact on fundamental growth may not be as severe as the market was concerned at the beginning of the second quarter.

In addition, Goldman Sachs raised the Hong Kong stock rating from low to standard, mainly based on the expectation of a weakening US dollar caused by the Federal Reserve's interest rate cut cycle. Goldman Sachs strategists believe that Hong Kong stocks will be one of the main beneficiaries of this trend.

It is worth noting that Goldman Sachs previously lowered Hong Kong stocks to low-level distribution in November last year. But since then, both the Hang Seng Index and the MSCI Hong Kong Index have recorded at least 18%.

Goldman Sachs believes that the Philippines is also one of the regional markets "most positive and sensitive" to the Fed's easing policy.

At the same time, in terms of specific regional allocation, Goldman Sachs maintained its stance on increasing holdings in the Chinese, Japanese and Korean stock markets, and downgraded the Malaysian stock market rating to a low-level distribution.

Goldman Sachs stressed that earnings growth will become the dominant factor driving regional stock market returns, and the 14-fold forward-looking price-to-earnings ratio of regional stock markets is consistent with the "macro model fair value", providing a reasonable valuation basis for future returns.

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