Chinese stocks are set to rally 30 percent in 2015 – following a 53 percent surge in 2014 – as policy makers continue to push through reforms and cut funding costs, according to the Managing Director at China International Capital Corporation (CICC), which correctly called last year’s rally, Bloomberg reports.
Even though the Shanghai Composite Index soared to a 5 1/2 year high on Wednesday, the index is still 45 percent below an all-time high that was reached in 2007, with valuations remaining low, Huang Haizhou, the Managing Director at CICC told Bloomberg.
China International Capital Corporation (CICC) was named as the top Chinese research team by the Institutional Investor magazine for a third year in a row in 2014.
“This is a multi-year rally,” Huang, who predicted last January that China’s stocks would jump 20 percent in 2014, said during an annual conference in New York on the nation’s economic outlook. The conference was hosted by the National Committee on United States-China Relations.
“There’s still time to buy,” Huang said.
In 2014, China was the best equity performer, surpassing Japan as the second-biggest stock market in the world, spurred by speculation that China will further ease monetary policy to support its slowing economic growth.
According to Huang, further gains are likely as the Chinese government is taking measures to curb risks in the financial sector.
China has stepped up efforts to cut local borrowing and is attempting to the tackle shadow banking industry – where lenders are shift financing activity off of their balance sheets.
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