Does a US$1.75 trillion bounce in Chinese stocks mean the market’s long march to recovery has begun?
- Chinese stocks at home and abroad have regained US$1.75 trillion of value since low points in January, soothing investors’ nerves worldwide
- China has made a U-turn with pro-growth efforts, after mistakes like the zero-Covid policy exacerbated a slowdown last year: Alpine Macro
Foreign investors made their return and presence felt by ploughing 60.7 billion yuan (US$8.4 billion) into onshore-listed stocks in February, ending six months of outflows, according to HSBC. Offshore China hedge funds and buy-and-hold investors led the charge.
Strategists at Alpine Macro, a research firm based in Montreal, are convinced that the US$1.75 trillion rebound in Chinese equities listed in mainland China, Hong Kong and New York since late January is only the beginning and will get even better.
“There are more clients coming back to look at the China market and asking us about market views,” Liu Minyue, an investment specialist at BNP Paribas Asset Management in Hong Kong, said in an interview. “Sentiment seems to be improving.”
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Chinese Premier Li Qiang delivers his first work report amid concerns about state of the economy
The MSCI China Index, which tracks more than 700 Chinese stocks listed at home and abroad, has risen as much as 14.5 per cent from this year’s lowest point, making it the best performer among major world indices in that period. In Hong Kong, tech stocks briefly surged into a technical bull market, having risen more than 20 per cent from a low on January 31.
The rebound is promising, soothing three years of losses when the index tumbled from its all-time high in February 2021. In all, almost US$10 trillion have been erased from Chinese stocks listed at home and overseas over the past three years.