Reference News Network reported on February 4 According to a Reuters report on February 1, the latest report on public funds shows that as policies focus more on promoting growth, Chinese investors are pursuing riskier assets, switching from bonds to stocks, betting Note the strong economic recovery.
Foreign funds have also been flowing into Chinese stocks, but analysts say the overall positioning of foreign investors is still conservative for now and there may be more inflows in the future.
The reported shift into riskier assets comes at a time when China is taking steps to boost its economy.
China's stock benchmark is up nearly 20% from its October lows.
"We are in the initial stages of recovery. This will benefit the stock market," said Mo Zhaoheng, investment director at Guangzhou Hanma Investment Management Co., who added to his stock positions in November and December.
According to data from Tianxiang Investment Consulting Co., Ltd., in the fourth quarter of last year, the assets of China's stock-type public funds increased by about 8.7%, reaching more than 2.47 trillion yuan.
Analysts at Goldman Sachs said the positioning of overseas investors has not fully caught up with improving market sentiment and fundamentals, suggesting that both international and domestic investors will continue to buy stocks.
Meng Lei, a China equity strategist at UBS Securities, said that as the Chinese stock market bottomed out in November last year, it is expected that the issuance of public funds will further increase in February.
Yang Delong, chief economist of Qianhai Kaiyuan Fund, said: "This will bring a steady stream of incremental funds, which will drive the market up."
According to a report by Nihon Keizai Shimbun on February 2, buying by foreign investors in the Chinese stock market continued to increase.
In January, the net purchase amount via Hong Kong was 141.3 billion yuan, setting a new high in a single month.
Funds are flowing into Chinese stocks in anticipation of an economic recovery.
Analysts at BNP Paribas believe that funds have concentrated on stocks related to consumption recovery such as liquor and tourism, as well as sectors that benefit from policies such as electric vehicles and photovoltaic power generation.
Sean Taylor, chief investment officer for the Asia-Pacific region of asset management company DWS, believes that China's stock market has begun to get rid of the previous long-term downward trend.
According to the report, the reason is that the market is optimistic about the Chinese economy.
Goldman Sachs predicts that China's economic growth rate will reach 5.5% in 2023, which is significantly higher than its forecast in November last year (4.5%).
Morgan Stanley also believes that corporate earnings will fully recover after the Spring Festival.
Bank of America surveyed about 80 Hong Kong-based investors in January on the outlook for China's stock market.
The results show that 78% of investors predict that Chinese stocks will rise by 10% to 20% in 2023, and 74% of investors predict that the upward momentum will continue until at least the second half of the year.
In the context of the resumption of customs clearance between Hong Kong and the Mainland, the high-tech sector of the Hong Kong stock market has obviously recovered.
According to the report, data from the Institute of International Finance showed that in December last year, US$6.3 billion flowed into Chinese stocks and US$5.1 billion flowed into Chinese bonds.
Russia's "Izvestia" website also published an article on January 31 by analyst Anatoly Kerim of BKS Investment World Company, saying that the Chinese stock market continued to maintain a strong momentum at the beginning of this year.
Factors that have a positive impact on this include the adjustment of epidemic prevention measures, the resulting positive expectations for the speed of economic recovery, the improvement of the regulatory environment, and support measures for the real estate industry and the overall economy.
The relaxation of anti-epidemic restrictions has promoted domestic population movement.
With the liberalization of the economy, domestic demand is expected to recover within 2023.
Against the background of global recession risks and persistent geopolitical tensions, domestic demand is the focus of high-level attention.
It should be noted that China's household savings rate is currently at a multi-year high (about 37%), which could be a catalyst for consumption growth after the relaxation of epidemic prevention restrictions.