China's worsening economic outlook is hard to ignore, but strategists remain confident about the country's equity market that has racked up solid gains this year.
A sharp slowdown in economic activity in August has reignited talks of a hard landing in the world's second largest economy. Nevertheless, Catherine Yeung, investment director, Fidelity Worldwide Investment, who maintains her overweight rating for mainland equities, says the government's reform momentum is keeping her optimistic.
"The macro economy is likely to continue to be bumpy, and we've said that going into the beginning of the year. [But] think of the reforms agenda as the new stimulus for China," she told CNBC, noting that investors are underestimating the government's resolve to usher in economic and financial reforms.
"There are amazing stocks opportunities, valuations are very attractive, sentiment up until recent has been very negative. So it's a stock picker's paradise," she said.
Reform momentum has gathered pace since November's Third Plenum, a key meeting of the country's top leaders, especially with respect to financial liberalization, state-owned enterprise (SOE) reforms and fiscal policy, according to economists.