China stops here — Gold­man

Financial Mail - Investors Monthly - - Opening Bell -

If we think we’ve got it bad in SA right now, spare a thought for China. Its mar­kets have been smacked this year, and even its un­re­li­able GDP growth num­bers are con­sid­ered to have fallen short.

Now China is get­ting booted by Gold­man Sachs, the US in­vest­ment bank fa­mously com­pared to the great vampire squid of global mar­kets, ac­cord­ing to Forbes.

In a 65-page re­port re­leased in re­cent weeks, Gold­man sig­nals an end to the China story, speak­ing of its “funny maths” and over­val­ued com­pa­nies. Gold­man now pre­dicts that China’s com­pa­nies will pro­vide an an­nu­alised re­turn of only 4% per year un­til 2020 — too low to jus­tify their lofty val­u­a­tions.

As Forbes sees it, “Gold­man Sachs has ba­si­cally thrown in the towel on China. Call it If you have a spare R23m you could buy this this unique restau­rant/bar, which was for­merly a pub­lic toi­let in Spi­tal­fields, one of the trendi­est spots in east Lon­don. The es­tate agents are mar­ket­ing this “charm­ing and quirky” prop­erty for £999,000 and say it is “bril­liantly si­t­u­ated” within easy walk­ing dis­tance to both Shored­itch and Al­gate. what you want — a soft land­ing, a hard land­ing, a trans­for­ma­tion, chopped liver — China is in de­cline.”

Bad news for Naspers per­haps, which has soared as a di­rect re­sult of its in­vest­ment in bur­geon­ing tech heavy­weight Ten­cent. Still, Naspers can al­ways lean back on its pan-African Pay-TV op­er­a­tion Mul­ti­Choice if all else goes to pot.

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