China's stock market could re-rate, real estate could slow significantly

Despite the recent turbulence in the Chinese stock market, some analysts remain bullish on Chinese stocks.

For example, a report from Bloomberg cites Societe Generale SA’s Asia equity strategist Vivek Misra as saying that the Shanghai Composite Index will rally 40 percent by the end of 2016.

“Chinese shares have the potential to re-rate,” Misra reportedly said.

However, for the health of the Chinese economy, the real estate market may be more important than the stock market.

Another Bloomberg report cites Barclays as saying that China's investment/GDP ratio is much greater than that in other emerging markets such as India and Brazil, as well as developed economies such as the US, and that real estate accounts for most of this increase.

"The outlook for the real estate sector remains the most important and the medium term path seems clear – a continued, multi-year slowdown of very significant proportions but not an imminent collapse," Barclays concluded.