Latest news with #MSCIChina
Yahoo
10-07-2025
- Business
- Yahoo
BofA Lowers Yum China (YUMC) PT, Keeps Buy Rating
Yum China Holdings, Inc. (NYSE:YUMC) is one of the 11 Best Food Stocks to Buy According to Wall Street Analysts. On July 7, BofA Securities reduced its price target for Yum China Holdings, Inc. (NYSE:YUMC) from $60.50 to $56.50 but kept a 'Buy' rating. The firm pointed out that Yum China Holdings, Inc. (NYSE:YUMC) has underperformed the MSCI China index by 16% since Liberation Day. This weaker performance was mainly attributed to investors reassessing the company's long-term growth after Yum China Holdings, Inc. (NYSE:YUMC) shifted its focus to smaller stores and franchising. The iconic yellow and red roof of a franchise restaurant in the bustling streets of a city. BofA's channel checks showed that Yum China Holdings, Inc.'s (NYSE:YUMC) same-store sales growth (SSSG) was around 0-1% in the second quarter. There were also indications that the performance in June might surpass expectations. BofA also observed sequential delivery order growth of over 10% in the past weekend. The research note also mentioned that Meituan and Alibaba have started offering strong delivery subsidies. These discounts could help Yum China Holdings, Inc. (NYSE:YUMC) achieve same-store sales growth in the third quarter of 2025, which is usually a busy season for the company. The research firm expects same-store sales to improve in the second half of 2025. Yum China Holdings, Inc. (NYSE:YUMC) is the largest restaurant company in China, operating more than 16,000 restaurants under 6 brands across more than 2,300 cities. The company operates and franchises restaurants under brands like KFC, Pizza Hut, and Taco Bell. While we acknowledge the potential of YUMC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best American Semiconductor Stocks to Buy Now and 11 Best Fintech Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
20-06-2025
- Business
- Yahoo
China was called 'uninvestable' not long ago. Why investors are changing their minds.
After investors fled in recent years, Wall Street is warming up to Chinese stocks again. Investors are encouraged as trade tensions ease and AI advances. Goldman Sachs identified 10 Chinese stocks it likes, including Tencent and Alibaba. Wall Street has shunned China's stock market for its volatility amid the country's economic issues. A trade war, tough regulations, and geopolitical tensions have made it difficult for investors to navigate, but as tensions ease and AI technology continues to advance, investors are starting to warm up to China again. "China has been a market that has been deemed almost uninvestable for the last year or two," Osman Ali, Goldman Sachs Asset Management's global cohead of quantitative investment strategies, said at the bank's mid-year investment outlook on Wednesday. "That's starting to change, both as a consequence of better growth, a consequence of reform, and also, hopefully some easing trade and tariff tensions." Investors' changing opinions on China come at a time when US exceptionalism is increasingly under scrutiny. Uncertain tariff policy has left businesses scrambling and cut into profit margins, and the rising US deficit has led to concerns about the status of US Treasurys as a safe-haven asset. That's not to mention the disruption that DeepSeek caused earlier this year, leaving investors wondering if US technological supremacy was as unrivaled as they once believed. A more optimistic tariff outlook is also boosting optimism. After the US and China dialed down trade tensions, Goldman Sachs raised its GDP growth estimates for China from 4% to 4.6% for 2025. The bank also raised its 12-month outlook for the Chinese equity indexes MSCI China and CSI300, pricing in an 11% and 17% implied upside, respectively. Nomura Capital also upgraded Chinese stocks to a "tactical overweight" in early May. Laura Wang, Morgan Stanley's chief China equity strategist, expects an increase in flows into Chinese equities within the next six to 12 months due to their low valuations and earnings growth outlook. She's eyeing increasing willingness among global investors to diversify into China, and Morgan Stanley has upgraded its MSCI China earnings growth outlook for this year by 2%. "There is a declining trend of US exceptionalism," Wang said on Bloomberg on June 5. "We are also seeing the technology breakthrough led by Chinese companies, which are potentially pushing up the ROE and earnings growth for MSCI China for the offshore space." While the Magnificent Seven have reigned supreme among US equities, China has its share of powerhouse companies investors might want to pay attention to. Goldman Sachs recently published a report identifying 10 of China's biggest stock market names with a buy rating, which the bank dubbed the "Chinese Prominent 10." These include Tencent, Alibaba, Xiaomi, BYD, Meituan, NetEase, Midea, Hengrui, and ANTA and span industries ranging from tech to pharmaceuticals. Some of these companies are already making waves both in and out of China. For example, the electric vehicle company BYD has generated sales comparable to Tesla and has expanded aggressively in Europe and Latin America. The bank believes these companies have the potential "improve their competitive and comparative advantages, generate positive equity returns for shareholders, and outperform vs. their industry peers in both the US and Chinese stock markets." Read the original article on Business Insider
Business Insider
20-06-2025
- Business
- Business Insider
China was called 'uninvestable' not long ago. Why investors are changing their minds.
Wall Street has shunned China's stock market for its volatility amid the country's economic issues. A trade war, tough regulations, and geopolitical tensions have made it difficult for investors to navigate, but as tensions ease and AI technology continues to advance, investors are starting to warm up to China again. "China has been a market that has been deemed almost uninvestable for the last year or two," Osman Ali, Goldman Sachs Asset Management's global cohead of quantitative investment strategies, said at the bank's mid-year investment outlook on Wednesday. "That's starting to change, both as a consequence of better growth, a consequence of reform, and also, hopefully some easing trade and tariff tensions." Sell America Investors' changing opinions on China come at a time when US exceptionalism is increasingly under scrutiny. Uncertain tariff policy has left businesses scrambling and cut into profit margins, and the rising US deficit has led to concerns about the status of US Treasurys as a safe-haven asset. That's not to mention the disruption that DeepSeek caused earlier this year, leaving investors wondering if US technological supremacy was as unrivaled as they once believed. A more optimistic tariff outlook is also boosting optimism. After the US and China dialed down trade tensions, Goldman Sachs raised its GDP growth estimates for China from 4% to 4.6% for 2025. The bank also raised its 12-month outlook for the Chinese equity indexes MSCI China and CSI300, pricing in an 11% and 17% implied upside, respectively. Nomura Capital also upgraded Chinese stocks to a "tactical overweight" in early May. Laura Wang, Morgan Stanley's chief China equity strategist, expects an increase in flows into Chinese equities within the next six to 12 months due to their low valuations and earnings growth outlook. She's eyeing increasing willingness among global investors to diversify into China, and Morgan Stanley has upgraded its MSCI China earnings growth outlook for this year by 2%. "There is a declining trend of US exceptionalism," Wang said on Bloomberg on June 5. "We are also seeing the technology breakthrough led by Chinese companies, which are potentially pushing up the ROE and earnings growth for MSCI China for the offshore space." China's 'Prominent 10' While the Magnificent Seven have reigned supreme among US equities, China has its share of powerhouse companies investors might want to pay attention to. Goldman Sachs recently published a report identifying 10 of China's biggest stock market names with a buy rating, which the bank dubbed the "Chinese Prominent 10." These include Tencent, Alibaba, Xiaomi, BYD, Meituan, NetEase, Midea, Hengrui, and ANTA and span industries ranging from tech to pharmaceuticals. Some of these companies are already making waves both in and out of China. For example, the electric vehicle company BYD has generated sales comparable to Tesla and has expanded aggressively in Europe and Latin America. The bank believes these companies have the potential "improve their competitive and comparative advantages, generate positive equity returns for shareholders, and outperform vs. their industry peers in both the US and Chinese stock markets."
Business Times
17-06-2025
- Business
- Business Times
US exceptionalism under pressure, but far from over
US EXCEPTIONALISM – the belief that the US economy and financial markets are uniquely positioned to outperform other global markets over the long run – has come under intense scrutiny this year. US President Donald Trump's disruption of global trade through erratic policies and aggressive tariffs, his attacks on universities, and growing concerns over rising fiscal deficits should the One Big Beautiful Bill Act be passed have all contributed to outflows from US equity markets in recent months. To put the current scepticism into perspective, it is worth considering how US markets have performed over the longer term. Over the past two decades, the S&P 500 has delivered total returns of approximately 643 per cent, significantly outperforming other major indices including MSCI China (388 per cent), the Straits Times Index (355 per cent), Stoxx Europe 600 (290 per cent), and the Nikkei 225 (266 per cent), as at Jun 13, 2025. In our view, the structural advantages that have driven this outperformance in equity markets are still very much intact. Hence, it is premature to declare an end to US exceptionalism. Here are some structural drivers of US outperformance. Rich culture of innovation and entrepreneurship The US has long been a global leader in innovation and entrepreneurship. According to the 2024 Global Innovation Index (GII), the US is the third most innovative country in the world, ranking the highest in nine of the 78 GII indicators including the impact of its scientific publications, intellectual property receipts, average research and development spending of the top three companies per country, and the quality of its universities. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Home to world-renowned institutions such as the Massachusetts Institute of Technology, Stanford University and Harvard University, the US benefits from academies that not only produce cutting-edge research but also serve as incubators for startups and groundbreaking technologies. While recent policy shifts – such as federal funding cuts to universities and the termination of certain student visas – pose near-term challenges to the innovation ecosystem, we believe the country's culture of innovation culture will prevail, supported by a robust network of private capital, world-leading tech companies, and universities actively fighting for their autonomy in court. This enduring innovative spirit is further bolstered by America's strong culture of entrepreneurship, which openly embraces risk taking and tolerance for failure. This is evident in its relatively forgiving bankruptcy laws that permit bankrupt businesses to continue operations while they restructure their debts. It is no wonder that the US has such a high level of entrepreneurial activity. According to the 2024 Global Entrepreneurship Monitor report, the US achieved a Total Early‑stage Entrepreneurial Activity rate of 19 per cent, well above the 12 per cent average for high‑income economies. In other words, almost one in five adults in the US is actively starting or running a new enterprise. Well-developed and deep capital markets Alongside a strong culture of innovation and entrepreneurship, the US boasts the world's most liquid and deep capital markets, providing the essential funding and resources needed to scale startups into major enterprises. In 2024, US startups attracted 57 per cent of global venture capital investment, far outpacing Europe and China, which accounted for just 16 and 12 per cent, respectively. This abundant access to capital enables individuals with promising ideas to turn them into profitable businesses. In turn, the presence of high-quality companies on US stock exchanges creates a self-reinforcing cycle that attracts even more high-calibre firms. Many companies around the world have forsaken their home markets in favour of a US listing to gain better liquidity and higher valuations. Just this month, one of the UK's biggest fintech companies, Wise, announced plans to move its primary listing from the London Stock Exchange (LSE) to the US, citing the shift as 'a potential pathway to inclusion in major US indices, further enhancing liquidity and demand for Wise shares'. While stock exchanges such as the LSE and the Singapore Exchange continue to struggle to attract initial public offerings, the US remains a thriving destination for global listings. Global leadership of American companies Many US companies operate on a global scale, holding dominant positions not only in the US but also in various international markets. This is particularly evident in the technology sector where Big Tech companies dominate their entire industry or even multiple industries. For instance, Amazon, Microsoft and Alphabet hold more than 60 per cent of the global cloud market share, while Alphabet, Meta and Amazon collectively capture more than 60 per cent of global digital advertising spending. Their key competitive advantages – such as network effects and high switching costs – have made their products and services integral to the daily operations of global consumers and businesses, enabling them to sustain growth and profitability over time. Therefore, while it might be relatively easy to boycott US companies such as Tesla due to the availability of substitutes, avoiding companies like Google or Nvidia is far more difficult. Furthermore, although China is showing signs of catching up technologically with the US – as demonstrated by companies such as DeepSeek – we believe that export restrictions on technology and the substantial capital investments by US tech companies will allow them to maintain their lead in the artificial intelligence race. US dollar's status as the world's reserve currency Finally, the US dollar's role as the world's reserve currency continues to underpin demand for US assets, allowing the country to finance its debts and deficits at relatively low costs. This unique advantage enables the US to fund consumption and public spending more easily than most other nations. Despite growing calls for de-dollarisation, the greenback remains deeply entrenched in the global financial system, accounting for nearly half of Society for Worldwide Interbank Financial Telecommunication transactions and about 60 per cent of global foreign exchange reserves. The reality is that while the US dollar is far from perfect, there are currently no viable alternatives. The yuan remains constrained by capital controls, the euro lacks a unified fiscal framework, and non-fiat alternatives like digital currencies are still in their infancy. Therefore, although the US dollar may continue to face headwinds in the near term, its entrenched position in global trade, investments and reserve holdings is likely to ensure its continued dominance for the foreseeable future. Don't write off the US just yet Warren Buffett's famous advice – 'Never bet against America' – continues to hold true today. While short-term sentiment towards US assets has soured amid economic uncertainty, the long-term foundations of US exceptionalism remain intact. These structural strengths have underpinned decades of outperformance in US equities and, in our view, are unlikely to be undone by recent political disruptions. The writer is a research analyst with the research and portfolio management team of FSMOne Singapore, the B2C division of iFast Financial
South China Morning Post
12-06-2025
- Business
- South China Morning Post
Bursting of US exceptionalism bubble a boon to Chinese stocks
The facts speak for themselves. On June 9, the Hang Seng China Enterprises Index (HSCEI), a gauge of mainland Chinese stocks listed in Hong Kong, entered a bull market after having risen 22 per cent since its recent low on April 7. The HSCEI and the MSCI China Index, which tracks Chinese companies listed at home and abroad, have largely outperformed all other major equity markets this year. That the sharp rally in Chinese shares occurred against the backdrop of deflationary pressures that show no sign of easing, low consumer confidence , a festering crisis in the property sector and a dramatic escalation in the US-China trade war makes the gains all the more remarkable. Several factors are at work. One of them, as Morgan Stanley noted in a report on May 20, is global investors' 'deeply underweight' position in Chinese equities following years of extremely bearish sentiment. This has created a 'sizeable allocation upside potential in moving from [an underweight to a neutral position]', Morgan Stanley said. A more important factor – and the most unexpected one – is the strong conviction on the part of many investors that the long period of US exceptionalism in markets has come to an end. US President Donald Trump's ruinous trade policies , blatant disregard for the rule of law and planned reckless tax cuts that add to America's ballooning public debt have cast doubt over the perceived safe haven status of US assets, especially the US dollar. The mantra of 'Tina' – There Is No Alternative – to US equities has given way to diversification as investors seek to rebalance their portfolios away from the United States. While there is intense debate about the pace and consequences of diversification, the waning appeal of US assets is a boon to Chinese stocks. Morgan Stanley says there is a 'higher willingness to add more positions in Chinese equities, fuelled by global diversification demand'. Nomura says 'the fading of the 'US exceptionalism' theme could help Asian equities', with China, India and Japan best placed to capture 'reallocation flows' given the depth and breadth of their stock markets. Goldman Sachs, meanwhile, notes that Chinese stocks tend to perform well when the yuan strengthens versus the US dollar.
