Templeton's man in China predicts 20% stock rally as panic fades

Hong Kong

THE worst is over for Chinese stocks after panicked investors caused the world's deepest sell-off, according to Franklin Templeton's money-management unit in Shanghai.

The US$5.3 trillion market will rebound as much as 20 per cent in the "short term" as economic growth picks up and yuan volatility decreases, said Lirong Xu, the chief investment officer at Franklin Templeton Sealand Fund Management Co, which oversees about 30 billion yuan (S$6.4 billion). He spoke less than two hours before the central bank cut lenders' reserve requirements, sparking a rally in China's offshore equity-index futures.