“We will see a bull run over the next 24 months," Tang said. "This year there will be a rerating story…We will see the new government pump up the economy very fast, and what’s very encouraging is that capital account opening and financial reforms have been much faster than we expected.”
Marco Polo expects China's A shares to gain between 200 and 500 percent over the next few years, to hit between 7,500 and 12,500 , a forecast the firm made in August last year. The firm’s views are at the most bullish end of the spectrum.
What’s going to turn things around, analysts believe, will be the China Securities Regulatory Commission’s decision in May to allow domestic brokerages, which now get most of their money from trading stocks and underwriting new securities, to expand into futures and derivatives, asset management, private banking and private equity.
China is also making plans to let Chinese insurers manage offshore yuan funds, a business now limited to fund houses and brokerages, giving a potential boost to the financial sector.
Like Tong, Cedric Ma, Convoy Asset Management’s Senior Investment Strategist in Hong Kong, is also betting on these reforms to boost Chinese equities in the second half of the year.
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