Business
UBS Forecasts MSCI China Index Surge Amid Profit Growth and Buy-backs: An Insight into the Market Dynamics Beyond GDP Growth
UBS shows optimism towards China, given that profit expansion and repurchases provide a 10% increase to the MSCI Index. James Wang, UBS's strategist for China, emphasizes that the stock market isn't propelled by GDP growth, but by enhancements in ROE and profit escalation.
The MSCI China Index is likely to see an increase of up to 10% within the forthcoming three to six months. This predicted rise is due to expected enhancement in earnings growth and companies' efforts to elevate shareholder returns via buy-backs and better governance, based on insights from UBS Group.
The increases will be fueled by an average profit growth of 7 per cent for corporations listed on the index during the latter half of the year, as well as some valuation growth, according to James Wang, the Swiss bank's chief of China strategy, who spoke at a briefing in Shenzhen on Monday.
Fascinatingly, our study of Asian markets, where investors usually pursue robust economic expansion, indicates that the link between yearly GDP growth and stock market outcomes is incredibly weak," Wang stated. "The force propelling the stock market is not GDP expansion, but enhancements in ROE and profit growth."
Discover more from Automobilnews News - The first AI News Portal world wide
Subscribe to get the latest posts sent to your email.