Goldman Sachs slashes its 12-month forecast for Chinese stocks by 20% after unprecedented regulatory crackdown

Goldman Sachs slashes its 12-month forecast for Chinese stocks by 20% after unprecedented regulatory crackdown

Goldman Sachs has dramatically cut its forecast for Chinese stocks in the wake of an "unprecedented" regulatory crackdown on the country's companies. The Wall Street titan now thinks the MSCI China stock index will stand at 103 in a year's time, 22% lower than its previous 12-month target of 128. MSCI China closed at 92.36 on Wednesday, according to Bloomberg data. Goldman analysts, including Kinger Lau, said in a note on Thursday that China's regulatory crackdown on companies "is unprecedented in terms of its duration, intensity, scope, and the velocity of new policy announcements." Chinese and Hong Kong stocks have fallen sharply this week after Beijing said it will ban companies that teach school curriculum subjects . The Chinese government has also tightened its grip on the country's big technology companies. It blocked Ant Group's blockbuster IPO in 2020 and ordered ride-hailing app Didi to be just days after its $4.4 billion US listing. Investors piled into Chinese stocks at the end of 2020 and start of 2021, as the economy rebounded from the coronavirus pandemic. But MSCI's China index - which includes China A shares, mid-sized companies and foreign listings - has dropped 28.8% since its February peak, according