As Goldman Sachs upgraded Chinese stocks to "overweight" status, boldly predicting that the Chinese stock market could rise by another 15-20%, market optimism reached a peak. The Hang Seng China Enterprises Index has risen by more than 30% over the past month, ranking first among the more than 90 global stock indices tracked by Bloomberg.

However, such an epic surge in the short term has still sparked a lot of discussion in the market. What exactly is the "momentum" for the market going forward?

Raymond Ma, Chief Investment Officer for Hong Kong and Mainland China at Invesco, emphasized the importance of fundamentals:

Market sentiment may overshoot in the short term, but people will eventually return to the fundamentals. Due to this rally, some stocks have been overvalued.

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He also added that he is not in a hurry to increase positions at the moment:

There is a batch of Hong Kong stocks that have risen by 30% to 40%, almost reaching historical highs... Whether the fundamentals over the next 12 months will be as good as they were before they reached their peaks is more uncertain to me, and this will be the position we may reduce.

JPMorgan Asset Management is also cautious, believing that whether more policy measures can be introduced is key, and the market is waiting for new policy guidance to be consolidated. Tai Hui, Chief Market Strategist for Asia Pacific at JPMorgan, said:

More policy steps need to be taken to boost economic activity and confidence. The policies announced so far can help smooth the deleveraging process, but the repair of balance sheets still needs to be carried out.

Tai Hui also believes that the uncertainty of the global economy will also have an impact, such as the U.S. election being just a month away.

However, considering that Chinese stock valuations are still low, many institutions are quite optimistic. Matthew Quaife, Head of Global Multi-Asset Investment Management at Fidelity International, said:The market rebound is not yet over, as there is still a significant amount of capital that needs to be rebalanced, especially from global investors. From a technical perspective, valuations are still below the mean, suggesting that the rebound could continue. Of course, the extent to which this rebound can translate into gains remains to be seen.