The Chinese government’s warning on financial risks is positive to the long-term growth of the equity and bond markets as speculative activity will be curbed, says Fidelity International.
China’s politburo said this week the government should attach great importance to preventing and controlling financial risks and should step up punishment of illegal activities in the financial industry.
This in turn put pressure on the country’s equity and bonds markets earlier this week, Fidelity International (FIL) said in a press release.
Strong Fundamentals
FIL however believes the government’s stance is healthy for the continued development of the Chinese capital markets.
«With the reporting season showing some good results, coupled with the stable economic backdrop, we expect Chinese stocks will be supported by strong fundamentals and reasonable valuations,» said Catherine Yeung, the Hong Kong based Investment Director, Fidelity International.
