Goldman Sachs Lowers Its Recommendation for Hong Kong Stocks

Goldman Sachs analysts have downgraded their market recommendations, noting that while Hong Kong stocks appear cheap, they may miss out on the benefits of China's efforts to support its economy. In a note on Asia-Pacific portfolio strategy published on Sunday, Goldman analysts stated, "Although valuations are demanding, Hong Kong does not offer much economic or earnings growth," and suggested "reducing weight" for Hong Kong. Goldman Sachs added, "The real estate and retail sectors continue to face pressure, and given China's focus on supporting its domestic economy, the economy may not benefit from policy support in China as much as it did before." The recommendation refers to local Hong Kong companies listed in the MSCI Hong Kong index.