“Recent data and measures by the government, including reducing down payments on first home purchases, reduced tax on autos, easing interest rates since the beginning of the year — all of this has been slightly positive,” Gabriel Wallach, founder of North Grove Capital LLC, told Bloomberg.
The optimistic outlook and cheap valuations have attracted the attention of large investors. For instance, Algebris LLP, a large London-based hedged fund, has been throwing tens of millions into Chinese stocks, betting that the August selloff marked a turning point, the Wall Street Journal reports.
“We are long Chinese equities for the first time in our history,” Davide Serra, chief executive of Algebris, told the WSJ, adding the probability of a full blown economic collapse in China is lower than what the market estimates.
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Max Chen contributed to this article.