Stability of China's markets making borrowers bold, while analysts brace for storm

Beijing

A SENSE of steadiness that has descended on China's markets after a flurry of regulatory activity has emboldened investors. Analysts, though, are waiting for the storm.

Liquidity has come roaring back after a dry spell during April and May, when President Xi Jinping ordered a check of China's financial system and an intensified focus on deleveraging saw mainland debt and equities tumble.

That, coupled with what seems like a lull in Beijing's regulatory fervour, has sparked a resumption in corporate bond buying and a return to borrowing as speculation takes hold that the worst of the crackdown may be over.

To market watchers from Pacific Investment Management Co to Australia & New Zealand Banking Group Ltd and Standard Chartered, that's a…