A-shares to outperform H-shares as Two Sessions nears

Mainland stocks are expected to outperform Chinese firms listed in Hong Kong in the next couple of months on the back of the two parallel sets of meetings early next month, says Goldman Sachs.

The prediction is based on the mainland market's sensitivity to policy changes, with expansionary fiscal policies expected to be reaffirmed at the annual plenary sessions of the National People's Congress and Chinese People's Political Consultative Conference known as the Two Sessions, according to the investment bank.

The bank said DeepSeek's artificial intelligence model has bolstered investor confidence, adding that the valuation premium for A-shares in the mainland over H-shares – Chinese firms traded in Hong Kong – has narrowed from 34 percent three months ago to 14 percent.

If it returns to the past year's average, A-shares could have around upside of around 10 percent, it said.

Hong Kong's Hang Seng Tech Index will continue to benefit from the AI frenzy, it said, maintaining its overweight stance on both A-shares and H-shares.

The CPPCC meeting opens on March 4 in Beijing and the NPC a day later.

STAFF REPORTER