Bulls Return to China’s Markets Just as Risks Start to Multiply

(Bloomberg) — Being bullish on Chinese financial markets is becoming consensus weeks after a brutal quarter that saw the nation’s assets become almost untouchable.

This month alone, brokerages including HSBC Holdings Plc, Nomura Holdings Inc. and UBS Group AG turned positive on Chinese stocks, citing reasons including cheap valuations and receding fear of regulation from Beijing. Asset managers BlackRock Inc. and Fidelity International Ltd. are buyers, while Morgan Stanley recommended owning the nation’s speculative-grade debt because prices had fallen too far. Betting on a strengthening yuan is a no-brainer to many currency analysts.