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UBS Forecasts 10% Upsurge in MSCI China Index Fueled by Profit Growth and Buy-backs: An Insight into China’s Market Dynamics with Strategist James Wang
UBS is optimistic about China due to profit expansion and repurchases, providing a 10% boost to the MSCI Index. UBS's China strategist, James Wang, asserts that the stock market is propelled not by GDP growth, but by enhancements in ROE and profit acceleration.
The MSCI China Index is likely to experience up to a 10% increase in the following three to six months. This is due to anticipated growth in earnings and the efforts of businesses to enhance shareholder returns via buybacks and better governance, says UBS Group.
The increases are expected to result from an estimated 7% profit growth for businesses listed on the index during the latter half of the year, along with some valuation growth, according to James Wang, the lead strategist for China at the Swiss bank. Wang made these comments during a Monday briefing in Shenzhen.
Wang intriguingly points out that in Asian markets, where investors usually aim for substantial economic expansion, there's barely a connection between yearly GDP growth and how the stock market performs. He asserts that the stock market isn't driven by GDP growth, but rather by enhancements in ROE and profit growth.
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