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To time a policy bottom in China, history shows patience pays

Bloomberg
Bloomberg3/17/2022 01:34 PM GMT+08  • 2 min read
To time a policy bottom in China, history shows patience pays
Based on recent experience, some traders are waiting to see whether or not this will be just a short-lived rebound.
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China investors with longer-term horizons may want to refrain from rushing in to buy this week’s bounce, as history shows the real bottom may still be a way off.

Encouraging commitments from the nation’s financial officials to bolster market stability have driven the Hang Seng Tech Index up 30% in two days, while the mainland’s CSI 300 Index has gained about 7%. Based on recent experience, some traders are waiting to see whether or not this will be just a short-lived rebound.

The events of the past couple of days bring back memories of the bumpy road out of a bear market a bit more than three years ago, when confidence was shattered due by deleveraging and the US-China trade rift.

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