Seeking Alpha: Goldman Sachs-China Stocks May Go Crazy in Second Half of 2011
From Seeking Alpha:
The chairman of Goldman Sachs Asset Management, Jim O’Neill, just came out with some very encouraging words for a big rally in China-based stocks and a general global stock market rally in the second half of 2011. These remarks were made during an interview on Bloomberg TV.
ONeill said the Chinese stock market could ‘go crazy’ in the next few months and spark a global stock market rally. The article goes on to say: ‘His positive comments on the outlook for China came as two people with knowledge of the matter said Goldman Sachs plans to set up a yuan-denominated private equity fund in the nation. Chief Executive Officer Lloyd C. Blankfein attended a ceremony for Goldman Sachs in Beijing yesterday, the people said, declining to be identified before an announcement.’
Those statements and actions by Goldman Sachs would seem to imply that Goldman sees a major opportunity in China based equities right now. The opportunities for growth in China are huge and after a tough couple of years for both Chinese and global stock markets. There is strong reason to believe that the long term fundamentals from China will again get traction from investors around the world. The population in China is so much larger and growing so much faster than the U.S., you can see a chart of the population growth here.
Unfortunately, the mindset of many American investors is too U.S.-centric and there is a belief that China based stocks will always have a lower PE ratio and valuation compared to their U.S. counterparts.
Posting from “Seeking Alpha” http://www.seekingalpha.com