Summary of a television interview · Based on the recording of the conversation
In brief
In an interview with Bloomberg TV Bulgaria, Kliment Robev discusses Goldman Sachs’s “Prominent 10” – a group of leading listed Chinese companies presented as a counterpart to the US “Magnificent Seven”. He sees it as the next important investment narrative, but believes a lasting return of capital to China requires less regulation and greater transparency. The conversation also covers Nvidia, oil and the Federal Reserve.
Key points
- He explains that what unites these companies is a sustainable business, stable financial results, sector leadership and aggressive innovation, but unlike the all-tech Magnificent Seven they come from different sectors (BYD, Alibaba, Tencent, Xiaomi), trade at lower multiples and have a market value about ten times smaller.
- In his view, Goldman Sachs aims to widen investors’ geographical horizons and revive interest in the Chinese capital market, and he expects exchange-traded funds bringing these companies together to be launched.
- He notes that almost all of them are investing heavily in AI and that US restrictions have forced China to produce its own chips on a large scale; as an example of how “nothing is lost, everything is redistributed”, he points to the roughly $8 billion in lost revenue that Nvidia reported because of the bans.
- Commenting on Nvidia’s return to the top as the world’s most valuable listed company, he says quality assets resurface even after shocks such as those in April, but warns that the company must remain adaptable, since stepping sideways carries the risk of stumbling.
- He believes the ceasefire between Israel and Iran is temporary and that a lasting rise in oil above $80, or even to $100, would be inflationary; combined with rising unemployment, this would lead to stagflation – in his view the most unpleasant, but unlikely, scenario for the US economy.
- He says the market welcomes the prospect of a new Fed chair in the hope of lower interest rates, but believes Jerome Powell will not let political pressure influence decisions that are guided by the labour market and inflation.
Context
The conversation was prompted by a Goldman Sachs note to investors grouping ten leading Chinese companies as the “Prominent 10”, and by Nvidia regaining its place as the world’s largest listed company. It also touches on the temporary ceasefire after the so-called 12-day war between Israel and Iran.
Views reflect his position at the date of publication and are not investment advice. Regulatory information
