Nov 09, 2018 (China Knowledge) - The latest global and Chinese macroeconomic data released by Goldman Sachs shows that global GDP is expected to grow by 4% year-on-year in 2018, which is still at an all-time high, though growth may slow down to 3.8% in 2019.
The new date resealed by the company, yesterday, notes that China's macro policies are positive; A-shares' valuations are low and overseas investors will remain positive on investment opportunities in the Chinese markets.
In the stock aspect, American and European asset allocation investors' appetite for A-shares rose to a 10-year high, with overseas investors more optimistic about A-shares than Chinese investors. The main reason is that A-shares are more attractive at less than 10 times PE compared with 17 times PE in the U.S., while A-shares are expected to increase from 5% to 20% in the MSCI Index, and the value of A-shares in the medium and long term has increased.
From the perspective of bond market, China's bonds will be included in the Bloomberg Barclays Global Aggregate Indices in 2019, which may provide a good opportunity for China's bond allocation.
In terms of policy aspect, China is formulating more easing policies to stabilize growth. China's State Council held an executive meeting last month, which proposed five measures to further promote the implementation of the policy on improving the business environment:
First, by the end of March next year, restrictions on foreign investment will be removed from the negative list of foreign investment access.
Second, further ease up administrative licensing and other matters.
Third, simplify approval of investment by enterprises.
Fourth, reduce the tax burden on enterprises.
Fifth, improve the efficiency of government services.
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