Sell China shares, says top forecaster

Volatility in the world’s wildest stock market is finally receding. If that is one argument for buying Chinese shares, Bocom International Holdings’ Hao Hong has a long list of reasons why you should steer clear.

For one, the Shanghai Composite Index’s valuation is above its long-term average, even after a 41% drop in the benchmark gauge since mid-June.

Government efforts to bolster the yuan will drain market liquidity, Mr Hong says, and plummeting equity volumes suggest investors lack faith in a rebound. He rejects the notion that targeted economic stimulus is enough to revive the bull market.