Monday, May 23, 2022
  • Privacy Policy
  • Copyright
TV USA | Live
Weather ☀
Exchange Rates $
  • Politics
  • International
  • Society
  • Sports
  • Blog
  • Contact
No Result
View All Result
  • Politics
  • International
  • Society
  • Sports
  • Blog
  • Contact
No Result
View All Result
TV USA | Live
No Result
View All Result
Home International

Global investors buy more mainland Chinese stocks

TV USA | Live by TV USA | Live
February 17, 2022
in International
0
Global investors buy more mainland Chinese stocks

A public screen displays the Shenzhen Stock Exchange and the Hang Seng Index figures in Shanghai, China, on Monday, Feb. 7, 2022.

Qilai Shen | Bloomberg | Getty Images

BEIJING — International investors are putting more money into Chinese stocks, even as local investors have remained cautious on the mainland markets.

Mainland Chinese stock funds saw net inflows of $16.6 billion in January — only the fourth time since the pandemic that monthly inflows have exceeded $10 billion, according to research firm EPFR Global. That followed nearly $11 billion in net inflows in December, the data showed.

“Investor interest in China has actually strengthened coming into the fourth quarter of last year,” Cameron Brandt, director of research at EPFR, said in a phone interview last week. “The driver there I think is a perception — especially among institutional investors — that in the emerging markets space, China is, for a variety of reasons, something of a safe play this year.”

The latest wave of buying is from institutions, rather than retail investors whose interest in China dropped off since early last year, Brandt said.

The divergent interest comes as global investment firms have turned increasingly positive on mainland Chinese stocks in the last several months.

Analysts are betting, in part, that Beijing wants to ensure growth in a year the ruling Chinese Communist Party is set to choose its next leaders at a national congress in the fall. At the same meeting, President Xi Jinping is expected to take on an unprecedented third term in power.

“Everything will need to look quite to perfection for [such] a monumental event,” Jason Hsu, chairman and CIO of Rayliant Global Advisors, said in a phone interview last week. “For anyone who is a rational investor, this is probably as favorable a sentiment as you’re going to get.”

China has also become “a good contrarian play” this year because the local market is entering a period of stimulus and easier policy, while the U.S. Federal Reserve embarks on a tightening cycle, Hsu said.

Goldman Sachs and Bernstein are so optimistic that they each released lengthy reports in the last few weeks recommending mainland Chinese stocks, also known as A-shares.

The upbeat calls come despite worries about how regulatory uncertainty may have made those stocks “uninvestable.”

“We believe China A shares, a US$14tn asset class, have become more investable given the ongoing liberalization and reform measures in the Chinese capital markets,” Goldman’s chief China Equity Strategist Kinger Lau and his team said in an 89-page report Sunday.

In the last 18 months, Beijing has cracked down on alleged monopolistic practices by Chinese internet companies and property developers’ high reliance on debt, among other issues. The sometimes abrupt policy changes have surprised global investors.

Global emerging markets funds have turned to India in the meantime, EPFR data showed.

“Managers of funds who run diversified funds, they’re less enthusiastic about China, certainly relative to other markets,” Brandt said.

Average allocation to China has fallen from 35% of the portfolio in the third quarter of 2020 to 27% as of Jan. 1, according to Brandt. During the same period, he said the funds’ allocation to India rose from 8.5% to 12.7%.

Market pessimism in China

Although the mainland Chinese stock market is the second largest in the world by value, it differs significantly from that of the U.S., the world’s largest.

Speculative retail investors rather than institutions dominate the mainland market, which for years has drawn comparisons to a casino.

But there have been signs of progress.

In a sign of how the market is maturing, index giant MSCI decided in 2018 to add some China A-shares to the benchmark MSCI Emerging Markets Index. The move forced international funds tracking the index to buy more A-shares. But retail investors still dominate the mainland market by far.

Our overall view is this year, [the] China market is not an easy bull market. It’s more likely to be buying on hope and selling on fact and results.

Winnie Wu

China equity strategist, Bank of America Securities

Weak onshore sentiment, along with better opportunities in developed markets, have contributed to J.P. Morgan Asset Management’s neutral view on Chinese stocks since early last year, Sylvia Sheng, global multi-asset strategist at the firm, said in a phone interview Monday.

She said if growth improves in the second quarter, sentiment could turn as well, noting: “We are actually looking to get more positive on Chinese equities.”

The Shanghai composite is up about 3% for February to-date after a week-long closure for the Lunar New Year holiday. The index had kicked off the year with a decline of 7.65% in January — its worst month since October 2018. Last year, the index posted relatively muted gains of 4.8%.

Everyone’s sentiment on investing in A-shares has dropped significantly, Schelling Xie, senior analyst at Stansberry China, said in a phone interview Friday. He pointed to uncertainty about the degree of change on regulation and economic growth.

Although some economists have said the worst of China’s regulatory crackdown is over, they also said it doesn’t mean a reversal or an end to new rules.

It will take time for the market to rebuild confidence, but it is not appropriate to be overly pessimistic right now, Xuan Wei, chief strategist of China Asset Management, said in a note. He added that there are opportunities in new energy and technological growth stocks.

China opening to foreign finance

While analysts assess Chinese stock performance, the mainland market increasingly offers business opportunities for international investment firms.

The financial industry is one of the few areas in which Beijing has relaxed ownership restrictions in the last few years. The policy changes have allowed BlackRock, Goldman Sachs and UBS among others to buy full control of their local securities or mutual fund operations.

“One of the reasons why we’re bullish is we work in an area where China has really opened up in a big, big way,” said Brendan Ahern, chief investment officer of KraneShares. The firm sells one of the primary U.S.-listed exchange-traded funds that tracks Chinese internet stocks, KWEB.

Read more about China from CNBC Pro

“In general, I think there’s this disparity between what the Chinese think about China and what foreign investors think about China,” Ahern said.

KWEB is up 3.8% for the year so far after dropping by more than 50% in 2021. Hong Kong’s Hang Seng index is up about 5.5% year-to-date, while the Shanghai composite is down about 4.7%.

Overseas investors generally “like to buy China for growth” rather than banks and other industries with many state-owned enterprises, said Winnie Wu, China equity strategist, Bank of America Securities.

However, she noted the state-owned businesses have led recent outperformers, a trend she doubts can lead to sustained gains for the market.

“Our overall view is this year, [the] China market is not an easy bull market,” she said. “It’s more likely to be buying on hope and selling on fact and results.”

TV USA | Live

See author's posts

Tags: Asia EconomyBlackRock Incbusiness newsGoldman Sachs Group IncHang Seng IndexiShares MSCI Emerging Markets ETFKraneShares CSI China Internet ETFMarket InsiderMarketsShanghaiStock marketsTechnologyUBS Group AGXi Jinping
Previous Post

Stock futures dip slightly as investors weigh earnings, Fed and geopolitics

Next Post

What Tolstoy would make of Vladimir Putin – POLITICO

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Stories

  • Capitol Hill's dangerous kangaroo court

    The desperation of the Jan. 6 House Committee

    0 shares
    Share 0 Tweet 0
  • U.S. sanctions on Russia violate the Constitution

    0 shares
    Share 0 Tweet 0
  • Voting kicks off in a New York City mayor’s race like no other

    0 shares
    Share 0 Tweet 0
  • Unleash the Power of Postbiotics in Pets

    0 shares
    Share 0 Tweet 0
  • Miguel Abadi Gems Tourism in Argentina

    0 shares
    Share 0 Tweet 0

International

João Baptista Borges: The Mucari Water Supply System reinforcement works
International

João Baptista Borges: The Mucari Water Supply System reinforcement works

May 20, 2022
João Baptista Borges: Project capacity of the nine electrical substations
International

João Baptista Borges: Project capacity of the nine electrical substations

May 16, 2022
Area S.p.A. gave a lecture at the University of Cagliari
International

Area S.p.A. gave a lecture at the University of Cagliari

May 13, 2022
João Baptista Borges: Water Supply Services to the Capital City
International

João Baptista Borges: Water Supply Services to the Capital City

May 10, 2022
Romain Girbal and Thibault Launay: Eager to consolidate its positions in the segment
International

Romain Girbal and Thibault Launay: Eager to consolidate its positions in the segment

May 9, 2022
João Baptista Borges: Solution for the extension of the distribution network
International

João Baptista Borges: Solution for the extension of the distribution network

May 5, 2022
The hi-tech company Area S.p.A. and Ca’ Foscari University together for the CyberchallengeIT project
International

The hi-tech company Area S.p.A. and Ca’ Foscari University together for the CyberchallengeIT project

May 5, 2022

TV USA | Live

 JNews - Premium WordPress news & magazine theme by Jegtheme.

 

 

© 2022 JNews. All rights reserved.

No Result
View All Result
  • Politics
  • International
  • Society
  • Sports
  • Blog
  • Contact

© 2022 JNews - Premium WordPress news & magazine theme by Jegtheme.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT