A raft of measures that the Chinese government announced last week has shored up international investors' confidence in the Chinese market, as more capital from foreign-funded institutions flow into the Chinese stock market, according to experts.
The government's financial authorities announced a broader-than-expected policy package to galvanize the economy's rebound last week.
These policy measures include reducing the reserve requirement ratio for banks and mortgage rates for existing homes, and introducing new monetary programs to boost the capital market, among other initiatives.
"The global response to the intensive adjustments in China's economic policies should be that they feel surprised on the one hand, and they quite approve it on the other hand. Hedge fund managers on the Wall Street are saying they want to go 'all in on China' and buy Chinese assets. Additionally, over the past week, we've received rapidly growing intensity of inquiries from large funds in Europe and the United States," said Lu Ting, chief Chinese economist with Japan's largest securities trader Nomura.
MarketWatch, a subsidiary of Dow Jones that provides financial information and business news, reported on Friday that the unleashing of the huge stimulus package has driven a four-day rally in stocks in the Shanghai Composite Index, and Chinese stocks could now be set to surge even further as international investors start to pile in.
September 24 alone saw Goldman Sachs' prime brokerage record its largest single-day net buying of Chinese stocks since March 2021, according to the report.
Goldman Sachs' technical strategist Scott Rubner wrote in a note that he had done more Zoom calls on China in the past 48 hours ending on Sept 26 than all of 2024, as he suggested investors are increasingly suffering from fear of missing out on the surge in Chinese stocks.
Kaanhari Singh, head of Asia Cross Asset Strategy at Barclays, said last week that the macro policies will stimulate China's economic growth over a two-year period.
Many foreign-funded institutions have also expressed their optimism about the prospects of China's capital market.
"Given the recent policy stimulus, I continue to like large capped liquid stocks such as the Internet platform and financials. In general, I think companies with high total shareholder returns, which means high dividend yield plus stock buyback potential, these are attractive to me," said Zhao Yaoting, global market strategist at the U.S. investment management firm Invesco for Asia Pacific (excluding Japan).
International investors more confident in Chinese market: experts
