Investors in mainland China turn to U.S. stocks for better performance, causing Chinese stocks to lag.

From CNBC: 2024-07-07 09:20:24

Mainland China investors are looking to U.S. stocks for better performance, as few major Chinese stocks have doubled in price this year. However, some Chinese stocks have still risen significantly, including Apple supplier Foxconn Industrial Internet, which soared 81% in the first half. Analysts are optimistic about iPhone casing sales and AI server demand.

Following closely behind Foxconn, Avary Holding jumped nearly 81% in the first half, benefiting from artificial intelligence-related demand in mobile phones and PCs. The company is expanding into new areas like automobiles and servers, garnering attention from top institutional investors. Huatai analysts rate Avary a buy.

Rounding out the top three CSI 300 performers, Zhongji Innolight climbed 70% in the first half. Nourma analysts are confident in the company’s leading position in global optical transceiver market due to strong management, execution power, and relationships with top AI infrastructure customers. Despite individual success stories, the CSI 300 index as a whole is struggling due to slower economic growth.

Capital controls in mainland China make it challenging for investors to access overseas markets, leading to an increase in ETF investments. Invesco’s joint ETF with Great Wall, tracking the Nasdaq, has seen significant demand, trading at a premium to its net asset value. This surge in buying has prompted the Shenzhen Stock Exchange to suspend trading multiple times.



Read more at CNBC: A soaring Nasdaq and Nvidia in the U.S. make China’s stocks look worse