China's benchmark stock index could rise another 10 percent on the back of "market positive" Chinese policy announcements, John Woods, chief investment officer for Asia Pacific at Credit Suisse, said Wednesday.
Woods' comments to CNBC came in reaction to Chinese Premier Li Keqiang's speech Tuesday at the National People's Congress, China's legislature.
Li highlighted risks threatening the world's second-largest economy as the government lowered its economic growth target range to between 6 percent and 6.5 percent.
In response, Li unveiled stimulus measures,including infrastructure spending and cuts in taxes and fees worth nearly 2 trillion yuan ($289.28 billion). Those included cuts in the value-added tax rate for manufacturing, transportation and construction.
"We took the decisions as being market positive," said Woods. "We think that the focus on infrastructure clearly lends itself to those commodities and equities which are in that space and we think will perform well."
He added that the VAT reductions will have a positive impact on a host of sectors, including consumer staples, consumer discretionary, materials and industrials and energy.
"Those are the sectors which our analysis suggests will benefit with an uptick in earnings growth of between 2 and 3 percent, which is meaningful, which is substantial," Woods said.
"So more broadly, the Shanghai composite I think's got another 10 percent upside before I start to take profit," he said. "But, of course, if the retail investor starts to engage, it could move substantially higher."
Woods added that he was impressed that the legislature was focused on the private sector: "To me, that's the main takeaway," he said.