The Hang Seng China Enterprises Index in Hong Kong became the first Asian equity benchmark to exit a bear market, posting a 21% advance in October, Bloomberg reported. Investors appear to be reassured by recent announcements from Beijing that the government will continue buying back bank shares and support small businesses. Zijin Mining Group (601899.SH, 2899.HKG), Anhui Conch Cement (600985.SH, 0914.HKG) and Agricultural Bank of China (601288.SH, 1288.HKG) have all rallied more than 39% since October 4. The H-share index has underperformed this year – last month it posted its worst quarterly loss in over 10 years – but the rally has helped trim its losses to 23% year-to-date. Investors remain concerned about hidden bad loans on bank balance sheets, worsening conditions for small Chinese businesses, and inflation, all of which have led some to conclude the Chinese economy is headed for a hard landing as it exits a stimulus period. “People are now realizing stocks were oversold,” said Yoji Takeda of RBC Investment Management in Hong Kong. Companies in the index are currently trading at 8.1 times estimated earnings, compared with a multiple of approximately 12 for Standard & Poor’s 500 Index.