THE China market scorecard didn’t make for great reading last year.

    Stocks were down the most since 2011 and bonds clinged on to the smallest return in three years. But for some assets at least, strategists see prospects of a turnaround.

    As far as starts go, it could hardly have been worse for the world’s second-largest stock market. By the end of January last year, the Shanghai Composite Index had plunged 23 percent.

    As stocks slowly clawed their way back, taking more than nine months to extend their rebound to 20 percent and enter a bull run in November, investors experienced a rare period of calm in what had frequently been the world’s most volatile major equity market.

    That serenity showed signs of cracking in December, with the Shanghai Composite Index falling 4.5 percent last month to cap the biggest annual drop since 2011, yet analysts are keeping the faith. The share measure will climb to 3,800 by the end of this year, according to the median forecast in a Bloomberg poll, implying a 22 percent gain from Friday’s close.

    “Weak growth momentum and external market performance weighed on stocks last year,” said Wei Wei, a Shanghai-based analyst at Huaxi Securities Co. “These concerns will probably continue to be in place going into this year. However, with the economy stabilizing, we expect to see more opportunities in stocks this year.”

    China’s official factory gauge matched a post-2012 high in November, corporate profits are rising, and factory-gate inflation has accelerated to the fastest pace in five years.

    About the only place where investors have seen gains last year was in the bond market, with a broad gauge of Chinese debt returning 1.3 percent as coupon payments made up for a decline in bond prices, according to Bank of America Merrill Lynch.

    Still, even there it had been a bumpy ride of late. China’s bonds were down 1.7 percent in December as efforts to reduce risk in the financial system exacerbated a liquidity squeeze. The yield on 10-year sovereign securities sat at 3.05 percent Thursday, versus 2.82 percent at the end of 2015.

    Money market rates are set to rise further in the first quarter, according to the median estimate in a survey of 24 bond traders, investors and analysts. More than half the respondents are expecting the selloff in China’s US$7.9 trillion debt market to last until at least the end of March. (SD-Agencies)