Overseas traders return to Chinese onshore stocks, tucking into blue chips amid longest buying streak this year
- Buying of Chinese yuan-traded stocks totalled US$7.6 billion over the past eight days, Hong Kong stock exchange data shows
- Investors prefer big names like Kweichow Moutai, China Tourism Group Duty Free and CATL, according to Eastmoney.com
Global fund managers are returning to Chinese yuan-traded stocks, as easing of lockdown measures and improving economic data reverse an exodus of foreign funds.
Overseas traders were net buyers via the Stock Connect link with Hong Kong for an eighth consecutive day through Wednesday, the longest streak since December, according to Hong Kong stock exchange data. Combined purchases totalled 50.9 billion yuan (US$7.6 billion) in the period, with investors preferring big industry players and green-economy names.
The return of foreign buying will help to further bolster confidence in China’s onshore shares and sustain a 12 per cent rebound since April, analysts said.
“Looking forward, we believe market expectation of economic rebound will strengthen in the near term given the marginal improvements in economic data and gradual implementation of policy stimulus, potentially providing continuous support to risk appetite recovery,” said Mary Xia, an analyst at UBS Group.
01:16
Shanghai erupts in celebration as two-month Covid-19 lockdown comes to an end
China’s growth prospects have brightened after Shanghai officially ended its two-month lockdown on June 1 and the capital Beijing began unwinding confinement in most districts, allowing restaurants and entertainment venues to reopen. The purchasing managers’ gauges of the nation’s manufacturing and services both picked up in May, although they still remain in contraction territory.
Liquor distiller Kweichow Moutai, retail banking giant China Merchants Bank and duty-free shop operator China Tourism Group Duty Free were among the most-bought stocks by foreign traders in the past week, data from Eastmoney.com showed. New-energy stocks like lithium-ion battery maker Contemporary Amperex Technology (CATL) and photovoltaic product manufacturer Trina Solar also topped the buying list.