The China Post reports:

Chinese shares listed on the mainland and in Hong Kong may reach their peak in mid-2008, while full-year returns on 300 key mainland large-capitalized stocks are forecast at a negative 11.3 percent for 2008, mainly due to high valuations, Goldman Sachs said.

Stocks of mainland Chinese companies listed in Hong Kong, or H shares, are expected, however, to generate a positive return of 8.8 percent next year, the investment bank said in a research report presented at a media briefing Wednesday.

"We believe euphoric sentiment and liquidity could potentially propel Chinese stocks to unsustainably high levels in the first half of 2008 before they subsequently retrace on growth, margin, inflation and valuations concerns," it said, citing next summer's planned Olympic Games in Beijing.

The report was written by a team headed by Thomas Deng, its chief strategist for China.

To read more:

http://www.chinapost.com.tw/business/2007/11/23/132062/Goldman%2DSachs.htm