(Yicai) July 5 -- Barclays Bank, Schroders and other international financial service providers have remained upbeat on China’s economic growth in their assessments of the upcoming second half.

Barclays has upped its forecast for China’s gross domestic product growth for the year to 5 percent from 4.4 percent, largely due to the country's stronger-than-expected first-quarter economic data, its research team said. This has led the London-based bank to raise its prediction for the economic growth rate in emerging Asian markets to 5.2 percent from the 4.8 percent made in March.

Schroders remains upbeat on the potential for a continued gradual recovery in activity in key stocks and sectors in mainland China and a rebound in technology sector fundamentals moving further into 2024, the UK asset management company said in a report released at the end of June.

"Even after the recent rebound, share prices in many sectors in Hong Kong and the mainland are not far off levels seen in the depths of the Covid restrictions when the earnings outlook was far more uncertain for most companies, the London-based firm said.

“Given this mismatch in share-price performance against operating fundamentals, and the still very low expectations for the Hong Kong and China markets, we continue to see attractive opportunities in selective areas on a bottom-up basis,” it added.

Citibank is optimistic about Chinese stocks listed overseas that are benefiting from national policies or better-than-expected performances, such as high and new tech Internet companies as well as high-dividend banks and telecom operators, said Ka Liu, head of investment strategy and asset allocation at the New York-based lender’s Hong Kong branch.

The first-quarter performance of Chinese tech and internet stocks generally exceeded expectations and they were able to generate increased shareholder returns, he said. This, together with the fact that the application of artificial intelligence is set to optimize costs and boost profitability, means that he recommends internet stocks, such as e-commerce, mobile gaming and travel platforms.

Citibank has maintained its target for the Hong Kong stock exchange's Hang Seng Index at 19,800 points by the end of the year, which has a 10 percent upside potential from current levels.

UBS recommends value stocks, or shares in companies that appear to trade at a lower price relative to their performance, which can be used as defensive investments in the short term. The Swiss banking giant is bullish on firms listed on both mainland and Hong Kong bourses such as oil majors CNOOC and Sinopec as well as rolling stock manufacturer CRRC and glass maker Fuyao Glass Industry Group.

Editor: Kim Taylor