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mark mobius, known as the "godfather of emerging markets", recently expressed his opinion that under stimulus measures, the chinese stock market has regained its vitality. the intensity and timing of this round of stimulus exceeded expectations, and the a-share index rebounded rapidly. in the short term, the rebound brings opportunities for industries such as technology and consumer goods. it will take time and more reform for short-term optimism to translate into a sustainable bull market.

mobius has managed templeton emerging markets fund - one of the world's oldest emerging market funds - since 1987. he served at franklin templeton for more than 30 years. templeton emerging markets group initially invested only us$100 million in six emerging markets. under his leadership, templeton emerging markets group has invested more than us$40 billion in emerging markets 30 years later.

chinese stock market comes to life

mark mcbride, picture source: mark mcbride’s official website

mobius wrote an article on the official website that under the large-scale stimulus, the chinese stock market has regained its vitality. the intensity and timing of this round of stimulus exceeded investor expectations. in the past few trading days, the csi 300 index has soared more than 20%, recording its best weekly performance since 2008.

"china is taking all measures to support economic growth and boost confidence in the stock market, including injecting liquidity into the stock market on a large scale, lowering bank deposit reserve ratios, and cutting interest rates. relevant departments are also taking measures to relax purchase restrictions, reduce existing mortgage interest rates, and lower second-hand mortgage rates. measures such as down payment requirements for suites to support the housing market are more intensive than the steps taken earlier this year. "so far, this round of stimulus measures has led to a strong rebound in the market. confidence, many investors who were waiting for the opportunity to enter the market seized the opportunity, both out of fear of missing out and because chinese stock valuations were indeed cheap.

reforms expected to lead to sustainable bull market

mobius said that despite the optimistic stock market sentiment after the introduction of stimulus measures, china still faces structural problems, which brings certain uncertainties to long-term growth. it will take time for the stimulus measures introduced this time to filter into the wider economy. only when stimulus measures penetrate into the real economy can we create the long-term bull market that everyone hopes to see.

mobius focuses on policy sustainability. he believes that in order to ensure sustained growth, china needs to support the growth and innovation of the private sector, especially large-scale entrepreneurs and innovation. translating short-term optimism into a sustainable bull market will require more reforms.

"i am cautiously optimistic about the chinese stock market, and broader and deeper economic reforms are needed to maintain the current momentum." he said, "this rebound will bring opportunities to industries such as technology and consumer goods, but whether the rebound can be sustained it’s a test.”

mobius said that as a long-term investor, he focuses on companies with strong fundamentals.

in june this year, 87-year-old mobius changed his view and believed that the chinese stock market had hit bottom. he said at the time that china's real estate market measures would help restore investor confidence. a trip to the south left him deeply impressed by china's infrastructure, prompting him to change his thinking about china's economy and stock market. in april previously, mobius had stated that he still held a pessimistic attitude towards the chinese stock market.

after the introduction of stimulus measures last week, foreign investors' sentiment towards the chinese market reversed sharply. in addition to mobius, many foreign institutions have expressed bullish views. for example, wang zonghao, head of china equity strategy research at ubs, said that the target price of the msci china index has been raised. given that china's stock valuations are lower than those in other major markets, the blackrock think tank raised chinese stocks to moderate overweight.