Goldman Sachs raised the 12-month Target Price for the MSCI Asia Pacific excluding Japan Index by 3% to 700 points, expecting an ROI in US dollars of 9%. The bank upgraded the rating for Hong Kong stocks from underweight to market weight, anticipating that a weaker dollar resulting from the Federal Reserve’s rate cut cycle will benefit Hong Kong stocks. A more favorable macro environment and increased certainty in tariff policies are the main factors driving this adjustment.
Goldman Sachs has upgraded its outlook for the Asian stock market, believing that the increased certainty of tariff policies and a loose monetary environment will bring bullish sentiments to the region’s stock market. The bank has upgraded its rating for Hong Kong stocks from underweight to market weight, expecting that the depreciation of the dollar due to the Federal Reserve’s interest rate cut cycle will benefit Hong Kong stocks and other markets.
On July 11, Goldman Sachs’ strategist team stated in their latest research report that they have raised the 12-month target price for the MSCI Asia Pacific excluding Japan Index by 3% to 700 points, expecting a dollar-denominated return rate of 9%.
The bank believes that a more favorable macro environment and the increased certainty of tariff policies are the main factors driving this upgrade.
The strategist team led by Timothy Moe pointed out in the research report that even if the tariff rates may be slightly higher than the current baseline expectations, the negative impact on fundamental growth may not be as serious as the market was concerned in early Q2.
In addition, Goldman Sachs has upgraded its rating for Hong Kong stocks from underweight to market weight, mainly based on expectations of a weaker dollar resulting from the Federal Reserve’s interest rate cut cycle. The Goldman Sachs strategist team believes that Hong Kong stocks will be one of the main beneficiaries of this trend.
It is worth noting that Goldman Sachs previously downgraded Hong Kong stocks to underweight in November of last year. However, since then,$Hang Seng Index (800000.HK)$Both the MSCI Hong Kong Index and the Hang Seng Index have recorded an increase of at least 18%.
Goldman Sachs believes that the Philippines is also one of the region’s markets most positively sensitive to the Federal Reserve’s loose monetary policy.
Meanwhile, in terms of specific regional allocations, Goldman Sachs maintains a Shareholding stance on the stock markets of China, Japan, and South Korea, while downgrading the rating of the Malaysian stock market to underweight.
Goldman Sachs emphasizes that profit growth will be the dominant factor driving returns in regional stock markets, and the 14 times forward PE of regional stock markets is consistent with the “fair value of the macro model,” providing a reasonable valuation basis for future earnings.
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