Top Investor Predicts 50% Surge in Chinese Stock Market!
Jeff deGraaf, co-founder and CEO of Renaissance Macro Research, recently stated that hedge funds that sold a record number of Chinese stocks just as the $CSI300(000300.SH)$ experienced a 35% gain over ten days will have regrets.
In his over thirty years on Wall Street, deGraaf believes there's rarely been a better moment to drive a long-term rally. He highlighted the current environment, saying there are "doubts, valuations, stimulus, momentum, and trend changes" at play.
A Bullish Stance on China
Given these factors, the veteran of Lehman Brothers and Merrill Lynch has positioned himself as one of Wall Street's biggest bulls on China. He predicts that the benchmark index could reach 6,000 points within the next 12 months, representing a rise of over 50%.
This outlook is notably more optimistic compared to Morgan Stanley's recently revised target of 4,000 points for the CSI 300 Index by June 2025. Morgan Stanley's cautious stance suggests limited upside for the index following Thursday’s close.
Strategic Caution for Investors
DeGraaf advises investors to maintain stop-loss orders when betting on China and to avoid impulsive decisions. With traders awaiting the fiscal policy briefing from the Treasury Department on Saturday, deGraaf downplays the potential risks the upcoming U.S. presidential election poses for the Chinese stock market.
BlackRock, which has historically adopted a cautious view on Chinese equities, recently upgraded its rating from "neutral" to "overweight." The firm argues that the valuation gap between Chinese and developed market stocks is near record levels, creating strong catalysts that could encourage institutional investors to reenter the market.
Goldman Sachs, often dubbed the "flag bearer of the global bull market," has also raised its rating on Chinese stocks to "overweight," increasing its target for the CSI 300 from 4,000 to 4,600 points.
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