Goldman says Chinese stocks may rise 40 per cent amid ‘more conducive trading environment’ in near term, while UBS raises ratings on Chinese and Hong Kong stocks to overweight.
Optimism is building in the onshore market after foreign investors sparked a rally, which was ably assisted by a rising yuan, boosting the market cap by US$228 billion.
Dual-listed Chinese companies traditionally command higher valuations for their shares on domestic exchanges than their own shares listed in Hong Kong. That premium, currently close to the highest in 13 months, is expected to widen next year on policy tailwinds, analysts said.