Goldman poised for China go-ahead

INVESTMENT bank Goldman Sachs is set to clear a major hurdle in its bid to start underwriting stock and bond sales in China, according to Bloomberg.

The Beijing-based China Securities Regulatory Commission may grant a brokerage licence to Goldman's Chinese partner, Fang Fenglei, as soon as this week, according to sources quoted in the report.

Earlier this week Smith Barney Citigroup analyst Ruchi Madan trimmed third-quarter earnings per share forecasts for Goldman, Lehman Brothers and Morgan Stanley, but issued a 'bullish' forecast overall.

While the third quarter is expected to be slow, Madan said that depressed valuations and a possible boost in fourth-quarter performances are positives for the sector.

'We expect that the third quarter is likely to be the trough in terms of EPS and estimate reductions,' Madan said. 'We expect investors to come off the sidelines with the only remaining bump really being uncertainty around November elections and other geopolitical concerns.'

Goldman is 'best-positioned' for a bounce, the broker added.