The China’s economic recovery is taking longer than expectedAccording to an expert report from citiwho delayed their forecasts for the Asian giant’s stock market rebound by three months.
Citi believes that the hang sengthe main stock index of the Hong Kong Stock Exchange, will not reach 24,000 points until end of septemberaccording to a report published on Thursday cited by CNBC. That is 18% above current levels.
The Hang Seng Index closed Thursday at 20,331.20 points, up 2.8% year-to-date.
“We expect the business results (of the first quarter of 2023) to be weaker, since post-COVID recovery seems slower than expected”, states the Citi report, cited by CNBC. Analysis of the 2022 results of 316 Chinese companies returned more negative than positive results.
Earnings from Chinese e-commerce giants JD.com and Alibaba also signaled more conservative spending trends among consumers.
Citi analysts also pushed back their recovery expectations for two other Chinese stock indices until the end of September: the CSI 300 and the MSCI China.
Likewise, the drop in exports due to lower growth in the United States and Europe is weighing down the Chinese economyalong with the collapse of the huge real estate sector, according to CNBC.
Credit strategy analysts at Goldman Sachs said in a report on Thursday that they anticipate the default rate of high-performing Chinese property developers will be 19% this year.
The gross domestic product (GDP) of China grew 3% in 2022one of the lowest rates in decadesaccording to official data published by the National Statistics Office (ONE) of the Asian country.
If 2020 figure is excludedthe year in which China reduced its growth to 2.2% due to the initial impact of the pandemic, the data for 2022 it is the lowest since the Asian country began its “reform and opening” policy in the late 1970sthe seed of the ‘economic miracle’ of the following decades.
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Source-www.infobae.com