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Goldman Says Market Sees 50% Risk of China Stocks Exiting US

  • US-listed Chinese firms’ valuations to rise if deal finalized
  • Long-term trend of ADRs moving to Hong Kong seen intact
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WATCH: Kinger Lau of Goldman says markets are still pricing in a 50% chance of Chinese companies being delisted from US exchanges even as the two nations reached a preliminary deal to resolve a decades-long standoff over audits. Source: Bloomberg

Goldman Sachs Group Inc. said markets are still pricing in a 50% chance of Chinese companies being delisted from US exchanges, even as the two nations reached a preliminary deal to resolve a decades-long standoff over audits.

According to the firm’s “delisting barometer” based on quantitative models, market calculations on the risk have come down from a peak of 95% in March but still more needs to be done as execution risk remains, strategists including Kinger Lau wrote in a note Monday.