Goldman Sachs downgrades Hong Kong stocks to underweight
Hong Kong stocks are cheap but may miss out on the benefits of China's efforts to support its economy, analysts at Goldman Sachs said, while downgrading their recommendation on the market.
«Although valuations are not demanding, Hong Kong does not offer much economic or earnings growth,» Goldman analysts said in an Asia-Pacific portfolio strategy note published on Sunday, which recommended an underweight allocation to Hong Kong.
«The property and retail sectors remain under pressure and the economy may not benefit as much from policy support in China as it previously has, given China's focus on bolstering the domestic economy.»
The recommendation refers to local Hong Kong companies found on the MSCI Hong Kong index.
In a separate China-focused note published on Monday, Goldman analysts reiterated a preference for owning mainland shares.
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