A Bank of America strategist who correctly predicted the rise: Chinese stock market is expected to continue to rise
Options strategist Lars Naeckter from Bank of America stated that the Chinese stock market is expected to further rise, especially after the implementation of policy stimulus measures, leading to an increase in bullish betting demand. He pointed out that although the Hang Seng China Enterprises Index has retraced some of its gains, the market still has upside potential. Naeckter recommended investors to adopt a bullish options strategy on the iShares China Large-Cap ETF, believing that there are opportunities in the market despite the lingering uncertainties between China and the United States
According to the information obtained by Zhitong Finance APP, a US Bank options strategist who previously correctly predicted the rise of the Chinese stock market now suggests that there may be even greater room for development in the momentum that has placed the Chinese stock market among the best globally this year, with many people preparing for it.
Lars Naeckter, the head of equity derivatives research for Asia Pacific at Bank of America, mentioned that there has been an increase in demand for bullish bets since China announced a series of stimulus measures. The cost of call options relative to put options for Chinese stocks listed in Hong Kong and the exchange-traded funds (ETFs) tracking these stocks on American exchanges has reached levels close to the highest since at least 2008.
Although the Hang Seng China Enterprises Index (HSCE) has retraced nearly half of its recent gains, Lars Naeckter believes that the stock market still has the potential to rise further given China's policy shift and investors' willingness to re-enter the market.
In early September, when the Chinese stock market indices were near their lows, Lars Naeckter recommended a bullish options structure that yielded over 360% returns. Lars Naeckter stated, "The opportunity still exists. With the balance between uncertainty and the scope and timing of ongoing stimulus measures, there is still significant upside potential in this market from here."
Furthermore, Lars Naeckter and his team advised investors to adopt a bullish options strategy on the iShares China Large-Cap ETF listed in the US. Lars Naeckter mentioned, "The noise between China and the US will continue, and the uncertainty surrounding this issue will persist. However, the bigger issue for market participants is China's policies and the upcoming meetings." He also added, "There is still a degree of skepticism in the market, which is a good thing in the sense that it may prevent an excessive rally."