Cause to buy, cause to sell China’s new bull market

As Beijing’s stimulus blitz sends China stocks skyrocketing, count economist Stephen Jen among the bulls who think China’s biggest rally since 2008 is just getting started.

“Chinese equities are extremely undervalued,” says Jen, the chief executive officer of Eurizon SLJ. Because “investors are so underweight everything Chinese,” he notes, “a serious rally is entirely possible.”

China’s bold moves last week to slash interest rates, lower mortgage rates, relax rules for homebuyers in major cities, reduce the amount of cash banks must keep in reserve – and telegraphed moves of stimulus to come – sent Chinese shares soaring for a ninth straight day on Monday (September 30).