From South China Morning Post:

The rebound in Chinese stocks has lifted the MSCI China Index by 14.5% and Hong Kong tech stocks into a bull market. Three years of losses are starting to reverse thanks to policy initiatives and state interventions totaling US$10 trillion. The Chinese economy expected to strengthen in the next 12 months.

Investors have become less bearish on China, expecting economic improvements and policy shift inflections. US$57 billion in state funds have supported the market, encouraging a shift in investor sentiment. It may only take minimal good news to drive a market turnaround as borrowing costs decrease and policies support funds.

Despite the recent challenges in the market, China remains a pro-growth market that attracts investors, even though nearly 75% remain dispirited in their long-term views. The industry has faced fund redemptions and consolidation, leading to lay-offs and closures. Sentiment is influenced by macroeconomic factors and geopolitical risks, beyond the industry’s control.

Value Partners, a Hong Kong firm, reported a difficult financial year in 2023, following significant losses. The firm’s Classic Fund saw losses as the negative feedback loop in China persisted. Many buy-side firms have trimmed headcounts and made staff reductions due to investor redemptions. The market in China remains challenging for fund managers.



Read more at South China Morning Post: Does a US$1.75 trillion bounce in Chinese stocks mean the market’s long march to recovery has begun?