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2024-07-25 14:29:15 Goldman Sachs wrote in a report that with less than four months remaining in the US presidential election, the outcome will have an impact on global asset markets, US-China relations and Chinese equity returns. The broker believed that Donald Trump now has a better chance of winning, and in the worst-case scenario, where the US imposes a 60% tariff on imports without any meaningful policy offsets, the fair value for the MSCI China Index would be lowered from 70 to 50, with a potential 13% decline from the current price. Technology hardware, capital goods, transport and durable goods sectors would be lagging, while consumer technology, consumer services and energy sectors would be better positioned. The report suggests that a 60% tariff by the Trump government would cut China's GDP growth by 2 ppts in one to two years, raise USD/CNY to 8 from the current 7.3 (although policymakers would not accept such a large change in practice), and reduce the earnings of listed companies exporting to the US by up to 13%. Past Goldman statistics showed that Chinese equities (A and H shares) have performed better under Republican US presidents in the White House and have risen by 84% under Trump's presidency, a compound annual growth rate of 16.48%, compared with a decline of 46% under Joe Biden's presidency. However, Trump's proposed measures are more hawkish than in previous Republican administrations, so the past data may not be meaningful by comparison. Goldman Sachs listed the most tariff-sensitive stocks in the MSCI China Index, with Hong Kong stocks listed below. Stock | US Revenue Share WUXI APPTEC (02359.HK) | 65% AKESO (09926.HK) | 65% GENSCRIPT BIO (01548.HK) | 60% BEIGENE (06160.HK) | 46% AAC TECH (02018.HK) | 43% ~ AAStocks Financial News Web Site: www.aastocks.com | |