(Yicai) Jan. 26 -- China’s stock market comeback over the past year and a half warrants full marks, according to the chief China economist at Nomura Holdings.

“The most successful policy measure in China over the past year and a half has been to revitalize the stock market, with the share prices of most companies rising,” Lu Ting said at a recent Nomura-hosted media event. The Japanese brokerage gives that performance a “perfect score,” he said.

The government’s economic and market policies have been well-balanced during the latest rally, Lu pointed out. “So far, financial regulators have done a very good job, taking both bold steps and demonstrating great caution to keep the market stable,” he said.

Commenting on the recent move by China’s three main stock exchanges to raise minimum margin requirements for leveraged trading, Lu said a key policy objective for this bull market is to avoid a repeat of the “frenzied” surge seen in 2015 and the sharp correction that followed.

Since around July to August last year, the overall policy stance toward the market has been relatively conservative and steady, he noted.

Lu said some degree of market cooling is necessary, as regulators must prevent overheating that could cause equity prices to decouple from underlying economic fundamentals.

Looking ahead, he said that if policy support continues to be implemented effectively, second-half economic indicators are likely to show further improvement. Combined with a relatively low year-earlier base of comparison for the final six months, growth this year is likely to follow a “weaker first half, stronger second half” pattern, he said.

Lu also flagged the possibility of a 0.1 percentage-point cut to the benchmark interest rate in the second quarter, but cautioned that with China’s rates already low by global standards, the boost to growth from such a move would likely be limited.

Fiscal policy will be the mainstay of economic management this year, Lu added, with structural monetary policy tools playing only a supporting role, he added.

Editors: Tang Shihua, Futura Costaglione