Man Who Called China's Boom and Bust Says Use This Rally to Sell
- Bocom's Hao Hong breaks ranks with peers on stock outlook
- Chinese equities in Hong Kong surge during mainland break
Chinese Equities See ‘Reasonable Technical Reprieve’
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Volatility in the world’s wildest stock market is finally receding. If that’s one argument for buying Chinese shares, Bocom International Holdings Co.’s Hao Hong has a long list of reasons why you shouldn’t.
For one, the Shanghai Composite Index’s valuation is above its long-term average, even after a 41 percent drop in the benchmark gauge since mid-June. Government efforts to bolster the yuan will drain market liquidity, Hong says, and plummeting equity volumes suggest investors lack faith in a rebound. He rejects the notion that targeted economic stimulus is enough to revive the bull market.