Chinese stocks have rallied significantly due to stimulus measures from Beijing, but global fund managers doubt the sustainability of this rebound, citing concerns about overvaluation.
Despite the recent jump of over 30% in the Hang Seng China Enterprises Index, some analysts believe many stocks have become overvalued, lacking solid value based on earnings.
Stimulus measures from Beijing, such as interest-rate cuts and liquidity support for stocks, foster optimism; however, fund managers remain cautious, recalling past rally failures.
Investment professionals are waiting for concrete action from Beijing to accompany its announced stimulus, fearing that enthusiasm for the stock market might outpace underlying fundamentals.
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