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China stocks picking up again? Don't bet on it, says strategist
CHINA stocks got a brief respite on Tuesday after five straight days of declines, but Bank of America Merrill Lynch strategist David Cui remains bearish.
Other than debt indicators flashing red, profit-taking and a shift in the government's attitude will keep stocks from rallying, he tells The Business Times in an interview.
"The market will most likely go down in the next couple of months ... Before early December, the government was encouraging people to buy stocks. Since then, various regulators have come up with policies to control leverage," says Mr Cui, who is the bank's head of China equity strategy.
"The government wants a slowly, steadily rising market, not a sharp move driven by leverage."
As of 3pm on Tuesday, the Shanghai Stock Exchange Composite Index was at around 3,200, up 2.4 per cent or 70 points from a day ago.