Goldman Sachs wealth-management executive warns against buying Chinese stocks, citing tepid growth, opaque policy

The bearish call reflects jitters among overseas investors about the outlook for the mainland China economy

Comments come as both onshore and offshore shares show nascent signs of stabilisation amid state support and the return of foreign inflows

2-MIN READ2-MIN

People cross a bridge with an electronic board showing stock prices in the financial district of Shanghai on February 22, 2022. Photo: AFP

Published: 3:30pm, 5 Mar 2024Updated: 6:23pm, 5 Mar 2024

A top executive with Goldman Sachs Wealth Management has warned against investing in Chinese stocks, hinting at ongoing jitters among foreign investors even as both onshore and offshore shares show nascent signs of stabilisation amid state support and growing foreign inflows.

Sharmin Mossavar-Rahmani, the chief investment officer of Goldman’s wealth-management business, said in an interview with Bloomberg News that she would not advise high-net-worth clients to buy Chinese stocks, citing moderation in growth, opaque policymaking and doubts over the authenticity of economic data as reasons.

The comments come as China’s top policymakers are trying to put an end to a three-year stock market decline and seeking the return of overseas traders. In February, Beijing put a new boss known for his tough stance on market malfeasance in charge of the securities regulator, penalised two hedge funds for disruptive high-frequency trading and imposed restrictions on short selling.

Foreign investors bought a net 60.7 billion yuan (US$8.4 billion) of onshore shares via the Stock Connect programme with the Hong Kong exchange in February, snapping an unprecedented run of six months of outflows valued at 201 billion yuan.

Sharmin Mossavar-Rahmani speaks at the Forbes Iconoclast Summit at New York Historical Society on November 03, 2022 in New York City. Photo: AFP

The CSI 300 Index has rebounded 12 per cent after hitting its lowest level in five years in early February, and the Hang Seng Index has risen about 4 per cent over the past month.

Mossavar-Rahmani’s bearish call on Chinese stocks reflects jitters among overseas investors about the dire outlook for the mainland China economy, which is struggling with headwinds from a protracted downturn in the property market, weak consumer spending and demographic change.