The Shanghai stock market is set for a boom after Chinese government reforms, a top fund manager said yesterday.

And Aaron Boesky, CEO of Marco Polo Pure Asset Management, said that investors should look east as China cuts interest rates and pumps money into creating a service economy.

“This is a superb moment to enter the market. It’s going to be a party in the Shanghai stock market in the next two years.”

Mr Boesky added that the Shanghai exchange, reopened in 1990, had gone through a series of spikes and slumps.

He said: “Fortunes can be made and lost in this market, no doubt about it — that’s why you need an experienced manager looking after things when you’re sleeping.”

Mr Boesky was speaking at a lunch and learn session organised by financial services firm LOM.

He told guests at the Royal Bermuda Yacht Club that the Chinese market was 99 per cent Chinese-owned and investors, with state-limited information, tended to move in packs.

He said: “It’s very homogenous — they are making the same decision at the same time. There is very little diversity. One of the advantages of this market is you can time it. You can look at this market, watch the Chinese, which we do a lot of at Marco Polo.”

Mr Boesky said over the last few years, a new Chinese administration had raised its interest rate, currently at more than 5 per cent, compared to near zero in the US and Europe, and cleaned up corruption after years of a building boom, but had now signalled interest rate cuts to stimulate service industries.

He added: “The new leadership has signalled to the market that they are essentially satisfied with the clean-up and they now want to see the economy go again.

“The leaders have a vision, which is spot on, that China will reaccelerate a second boom which will be services-driven.”

Mr Boesky — cousin of Ivan Boesky, a high-flying New York financial wizard who was jailed for insider trading in 1986 — said that the new approach by the Chinese government had only been in place for six months.

He added: “We haven’t seen any major results of the GDP number. We haven’t seen the numbers up yet, it hasn’t popped. But we have seen the stock pop. We had the first pop and it’s a good one.

“But it’s not by any means a bubble or overvalued right now. I can say with a high degree of certainty this has just begun. We’ve now had a second rate cut to 5¼ per cent and these cuts are likely to continue.”

Mr Boesky said his fund was the longest-established in the market and was up 200 per cent since it started 12 years ago.

He added that Marco Polo had “the best track record in Asia” and had turned in double the market rate, while limiting risk for investors.”

And Mr Boesky said: “This is a superb moment to enter the market. It’s going to be a party in the Shanghai stock market in the next two years.”