Factbox-Analysts’ 2022 outlook for Chinese assets

SYDNEY (Reuters) – Investment houses have started publishing their predictions for Chinese asset prices in 2022 following a bruising year for the financial markets.

The Hang Seng equity index has gained about 4.4% so far this year after losing more than 14% in 2021.

The MSCI China index rose nearly 3% after wiping out 23% of its value last year, against a 17% rise in world stocks during the same period.

On Jan. 13, the Hang Seng was at 24,422, MSCI China at 86.082 and the blue-chip CSI300 index at 4,818.8.

Here is a summary of some forecasts for Chinese assets at the end of 2022:

INVESTMENT HANG SENG MSCI CHINA CSI300 USD/CNY

house target target target

Goldman 105 5,500 6.2

Sachs (12-month

forecast)

Morgan 25,000 95 6.4

Stanley

5,300

Barclays 6.5

HSBC 28,030

5,600

Standard 6.5

Chartered

KEY COMMENTS:

* GOLDMAN SACHS

“We believe Chinese stocks will have a better year in 2022 as the market recovers from a major correction and transitions into a ‘hope’ phase, where P/E expansion typically trumps weak fundamental growth and drives strong equity gains.”

* MORGAN STANLEY

“MSCI China has had its worst ever relative performance drawdown versus broad emerging markets in 2021 … despite such a record underperforming year, we still see some lingering risks skewed towards higher volatility or more downside in the near term. This makes us believe that now is not yet the right time to go bullish at a broad index level.”

* HSBC

“We think markets have been overzealous in selling Chinese stock … most funds are underweight and as the focus returns to growth in China, we think this market will roar back.”

* Credit Suisse

“Amid the expected relatively friendly policy environment and reasonable liquidity, we remain constructive on China A-share markets, despite the possible negative impact from the expected Fed’s tightening cycle. The Hong Kong stock market is likely to have a bigger impact from overseas macro and market volatilities, while we expect sector rotation could tilt back towards growth.”

(Reporting by Tom Westbrook and Winni Zhou; Editing by Rashmi Aich, Shailesh Kuber and Shounak Dasgupta)