China's local-currency stocks could face "further weakness" as investors weigh concerns about tightening measures by the government and availability of funds, said Goldman Sachs & Co in a note yesterday.

 

"We stay cautious on A shares due to valuations, liquidity and growth concerns," wrote Goldman Sachs analysts in the report. "High valuations and low forward earnings visibility prevent us from taking a more constructive view."

 

China's CSI 300 Index, which tracks local-currency A shares on the Shanghai and Shenzhen exchanges, tumbled 17 percent in November, the steepest monthly drop in its two-year history. The Shanghai Composite Index dropped 18 percent last month.

 

(Shanghai Daily December 5, 2007)