GOLDMAN Sachs Group Inc. is joining the rush on Chinese shares, becoming the latest major brokerage to upgrade the market thanks to mounting evidence of strength in the largest Asian economy.

    The bank’s strategists are now overweight Chinese stocks, with their 12-month forecast for the MSCI China Index boosted to 73 points from 68, according to a note dated yesterday from Goldman analysts including Kinger Lau and Timothy Moe in Hong Kong. That represents a gain of almost 25 percent for 2017.

    The MSCI China gauge has already climbed 11 percent this year, outpacing the wider Asian region and the 5.6 percent advance in global stocks. Improving economic data have burnished the appeal of Chinese assets since Goldman lowered China to market-weight on Dec. 1. Analysts anticipate that policy measures will continue to be supportive given the twice-a-decade Communist Party meeting later this year.

    “Policy and growth dynamics should stay conducive leading up to the 19th Party Congress,” the analysts wrote.

    Goldman listed risks to their outlook that include a potentially more hawkish People’s Bank of China — a possibility flagged by other investors as well. The Federal Reserve’s tightening cycle may also weigh on the yuan’s exchange rate with the dollar, as could the continuing overhang of a conflict over trade between the United States and China.

    (SD-Agencies)