(Yicai) Oct. 10 -- Goldman Sachs and other overseas-funded financial institutions are confident about the prospects of long-term investments in China, after the country’s stock markets staged a strong comeback following the roll out of a hefty economic stimulus package.

Goldman Sachs recognizes China’s long-term development potential, Sean Fan, co-head of the US investment bank's China arm said at the 2024 Shanghai Global Asset Management Forum today. Despite facing challenges in recent years, the New York-based bank continues to invest in China due to its status as the world’s second largest economy.

The recent stock market rally has boosted market sentiment to some extent, Fan said. But it would be better to see a slow but stable bull market, rather than quick gains followed by a big drop. The continuity and predictability of policies are paramount to the market, he added.

The mainland stock markets surged for six consecutive days after the People’s Bank of China announced a raft of monetary easing measures on Sept. 24, including trimming the reserve requirement ratio for banks and cutting existing mortgage rates. Single day turnover on the bourses set multiple new records.

BlackRock has upgraded the mainland stock markets for the first time in many years, said Fan Hua, director of the US asset management giant’s China branch. Chinese assets are still undervalued compared with global stocks. The new policies have buoyed market confidence, bolstered business profitability and increased people’s income expectations.

The latest stimulus drive has played a key role in boosting market confidence, said Leo Shen, general manager of German insurance giant Allianz's wholly-owned Chinese unit Allianz Fund Management.

Allianz remains upbeat on China, despite the hurdles it has faced in the past few years, as there are no changes to China's global competitiveness in terms of industrial capabilities, labor force flexibilities, technological strength and industrial chains, Shen added.

Investors should determine their asset allocation goals and their ability to bear risk before choosing their multi-asset, multi-strategy and worldwide allocations in order to diversify risk, Fan Hua said.

Editors: Dou Shicong, Kim Taylor