Business
UBS Predicts 10% Upsurge in MSCI China Index Amid Profit Growth and Buy-Backs: A Focus Beyond GDP
UBS is optimistic about China as profit increase and repurchases boost MSCI Index by 10%.
UBS's China expert, James Wang, points out that the stock market is not propelled by GDP growth, but by enhancements in ROE and profit expansion.
The MSCI China Index is likely to experience an increase of up to 10 per cent within the coming three to six months. This is due to an expected surge in earnings growth and businesses aiming to enhance shareholder returns via repurchasing shares and enhancing governance, as per UBS Group's predictions.
The increase will be fueled by an estimated 7% rise in earnings for firms listed on the index during the latter half, along with some value growth, according to James Wang, the chief strategist for China at the Swiss bank, who spoke during a press conference in Shenzhen on Monday.
Intriguingly, our study of Asian markets, which are usually targeted by investors for robust economic growth, reveals a barely noticeable link between yearly GDP growth and the performance of the stock market," Wang stated. "The force behind the stock market is not GDP growth, but enhancements in ROE and the growth of profits."
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