Global funds are increasing their exposure to Chinese assets3cardpokerThe strength of the configuration. Recently, Goldman Sachs said in its latest report3cardpokerOverseas hedge funds have increased their holdings of Chinese stocks for the fourth consecutive week. According to Wind data, as of May 23, the net purchase amount of Beixiang Capital reached 92.7 billion yuan this year, far more than the whole of last year.
Liu Chunsheng, an associate professor at the Central University of Finance and Economics, said in an interview with the Huaxia Times that the return of foreign capital to Chinese assets reflects the reversal of international investors' sentiment towards China's stock market, the gradual recovery of confidence, and the long-term optimism on China's capital market. The continuous inflow of foreign capital can not only bring incremental funds to China's stock market, enhance market liquidity, but also help to stabilize market sentiment and promote the healthy development of the capital market.
Foreign investors continue to run into the market.
According to Wind data, the return of northbound funds, known as "smart money", began in February this year, and the net purchase of northbound funds increased to 927 in the year to May 23.3cardpoker.23 billion yuan, far exceeding the annual net purchases in 2022 and 2023, betting on the A-share market with "real gold and silver". Among them, on April 26 alone, northbound funds bought 224 net.3cardpoker4.9 billion yuan, the highest one-day record since the opening of the Land-Port Link.
At the same time, the recent disclosure of 13F report also shows that many institutions increased their positions in Chinese stocks in the first quarter of this year, including Temasek, BlackRock, Goldman Sachs and other management giants. There are signs that global enthusiasm for the allocation of Chinese assets is accelerating.
"since the end of October last year, we have been bullish on Chinese stocks at the strategic level and raised the allocation of stocks to 100% in the simulation position." Liu Mingyi, chief Asia and China equity strategist at JPMorgan Chase, admitted that foreign underallocation of Chinese stocks has also narrowed as the market rose in April and May, but there is still room for improvement.
As foreign investors increase the allocation of Chinese stocks, A shares, Hong Kong stocks and Chinese stocks collectively staged a wave of "big counterattack". Since the low set on January 22, as of May 20, the Prev Index has risen 11.96%, while the Hang Seng Index has risen 28.27%. The MSCI China Index has surged more than 31%, leading the world's major stock markets. However, from May 21 to 23, Chinese assets fell into a state of adjustment for three consecutive days, and the rally seemed to have come to an end.
The attraction of Chinese assets is becoming more and more obvious.
What is the reason behind the accelerated inflow of foreign capital into Chinese assets? In the view of many people in the industry, valuations in China's stock market have returned to low levels after adjustments over the past few years, and this year, with the improvement in the fundamentals of China's economy and the significant moneymaking effect brought about by the rise in A shares, Hong Kong stocks and US-listed stocks, global capital flows to Chinese assets continue to increase.
Liu Chunsheng believes that there are three main reasons why foreign investment continues to increase Chinese assets: first, China's strong economic growth resilience is a key factor in attracting foreign investment. China's GDP grew by 5.3% in the first quarter, exceeding market expectations, and is expected to continue to improve in the second quarter, further supporting stock valuations and boosting capital market confidence; second, the overall valuation of A shares is in a global depression, which is also an important factor in attracting foreign investment. At present, the price-to-earnings ratios of the Shanghai Composite Index and the Shanghai and Shenzhen 300 are much lower than those of the major indices in the United States, Japan, France, the UK and other markets. In addition, with the strengthening of stable growth policies and the deepening of capital market reform, market risk appetite is expected to increase.
On the risk side, Liu Chunsheng said: "from the external environment, although the Fed has basically announced the end of this cycle of raising interest rates, the model of interest rate reduction has not yet been opened." In addition, the uncertainty created by the US election year, the escalation of international geopolitical risks, and the turmoil in the global economy will all stimulate foreign capital to flee, adversely affecting Hong Kong stocks and US-listed stocks. "
Zhang Junxiao, head of the aggregate cycle group of the Penghua Fund Research Department, said that on the whole, the rise in Hong Kong stocks is the result of fundamental and capital resonance, and foreign investors are more involved in the market. From the perspective of transaction structure, this round of funds concentrated into Hong Kong stocks Internet giants, followed by financial and real estate.
In short logic, these sectors are highly related to domestic economic prosperity, so to a certain extent, they also contain improvements in macro and policy expectations; in long logic, some typical Internet platforms, after a period of rapid growth, there are signs of increasing the scale of dividends and buybacks, and the value attribute is gradually highlighted.
"maximum return of 35% in the next six months."
Standing at the current time, whether this round of rising market can continue and whether foreign investors can continue to bet on Chinese assets has become the focus of attention of many investors. Looking to the future, a number of institutions believe that the current A shares, Hong Kong stocks and other markets overall valuation is not high, with a better investment attraction, the future repair market is still expected to continue.
According to historical data, there is still a 60% chance that the Chinese stock market can continue to rise after rising more than 20% and entering a technical bull market, with an average potential maximum return of 35% over the next six months, Goldman Sachs said in its latest report.
For the future positive direction, Boshi Fund told the "Huaxia Times" reporter that A shares, multi-line real estate policy, support the production chain and improve the industrial dilemma, enhance market risk appetite, and further wait for volume and price data verification.
Fall on the structure, first, the spread of the market in the real estate chain. However, for real estate stocks, the future period of time policy catalytic density decline, policy effect has not yet been shown, stock price upward resistance is likely to increase. Second, the macro scenario still does not support a substantial shift to pro-cyclical plates, adhere to the "dumbbell" strategy, that is, one side is resources, optimistic about the medium-term resources bull market, the other is value and technology, the game short-term recovery trend.
In terms of Hong Kong stocks, Huaxia Fund told the Huaxia Times that this round of rise in Hong Kong stocks is mainly because it is in a global valuation depression, which is jointly catalyzed by macro expectations to build a bottom and improve Hong Kong stocks' profits. Since April, the biggest gains have come from Hong Kong stocks' high dividends and Hang Seng Technology. Hong Kong stocks' Internet-based Hang Seng Technology may have been basically repaired; Hong Kong stocks' high dividends may still have room to rise. Its valuation is still low in the world and the dividend yield is at a high level in the world.
Hu Di, director of China Index and quantitative Investment Department of JPMorgan Asset Management, believes that Hong Kong stocks may have some differences and shocks after rising rapidly in April. However, with the improvement in the fundamentals of the domestic economy, monetary policy in developed economies may turn loose, as well as the undervaluation of Hong Kong stocks and the fundamentals of improved profits, Hong Kong stocks may have room for further improvement.
