Flower underdowngrades South Korea and upgrades China’s stock ratings, as it expects the rally in emerging markets to expand further in scope

PANews July 20, news, citing Caixin, that Citi has cut its rating on South Korean stocks for emerging-market asset allocation while raising its rating on Chinese stocks. The reason is that the South Korean market is volatile in trading, and as this year’s rally led by a handful of artificial intelligence winners is expected to spread to a wider range of sectors, the Chinese market could benefit.

Citi strategists including David Groman wrote in a report, “If the macro environment continues to be favorable, including easing geopolitical risks, there is room for a broader expansion.” Citi downgraded its rating for the South Korean stock market from “overweight” to “tactical neutral.” At the same time, Citi raised its rating for China’s stock market to “overweight,” and lifted its rating for Mexico’s market to “neutral,” viewing them as underlying targets for a potential broadening of upside opportunities within emerging markets.