From South China Morning Post: 2024-04-25 19:30:19

Global investors are increasingly positive on Chinese stocks, with a significant rebound in the CSI 300 Index following recent regulatory action. GEM funds have shifted to a neutral position in mainland China, reducing allocation in Taiwan. UBS upgraded their rating to overweight, foreseeing a 40% upside, as Goldman Sachs cites continued reforms for growth.

This positive trend signals a return of foreign investors to China’s stock market after recent challenges. Regulatory changes have bolstered the market, including increased transparency and shareholder returns. Overseas investors bought $3.04 billion of Chinese stocks in March via the exchange link program, snapping a six-month outflow streak through January.

Despite improved sentiment, concerns linger over China’s economic fundamentals, with retail sales and industrial production missing projections. The property market downturn is worrisome, given its significant contribution to the economy. Growth concerns have led to warnings that the first quarter may have seen peak growth.

Asian and emerging market funds are reducing positions in Taiwan stocks, which heavily feature tech giants like Taiwan Semiconductor Manufacturing. In contrast, holdings of Korean stocks are rising, propelled by the nation’s value-up program. Overall, Asian stocks are facing outflows due to rising US Treasury yields and a stronger dollar, with varying impacts across different markets.



Read more at South China Morning Post: Global fund managers build ‘significant exposure’ to Chinese stocks in sentiment shift, HSBC says