Investors might consider adopting a riskier strategy in the second quarter, investment bank UBS said yesterday.
It said it expected the rebound in the A-share market to be sustainable owing to the economic recovery on the mainland.
Gao Ting, the chief China strategist at UBS, said the bank had overweighted the US and emerging markets, including the A-share market.
"Investors may consider increasing riskier investments like stocks when inflationary pressure is mounting," he said. He forecast a 3.1 per cent year-on-year increase in consumer prices on the mainland and annualised 8.3 per cent economic growth in the second quarter.
The rebound in the economy would be negative for the bond market, Gao said, suggesting underweighting fixed-income investments.
"Unlike the previous rebound in the A-share market, the uptick since last December is backed by sound fundamentals, so I expect the rebound to continue this time," he said.