Investors advised to use current China rally to sell
Man who called China's boom and bust rejects notion targeted stimulus is enough to revive bull market
Hong Kong
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 per cent drop in the benchmark gauge since mid-June. Government efforts to bolster the yuan will drain market liquidity, Mr 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.
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