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China's stock attract $21bn.

 Global investors have snapped up a record $21bn worth of Chinese equit­ies this year as robust eco­nomic data spurs traders to make lar­ger bets that the reopen­ing rally has fur­ther to run.

Temple of heaven

For­eign buy­ing of Shang­hai and Shen­zhen-lis­ted shares through Hong Kong’s Stock Con­nect pro­gramme has rock­eted to Rmb141bn so far in 2023 — more than double the pre­vi­ous record for the same period in 2021.

The Con­nect scheme, launched in 2014, allows investors with a pres­ence in Hong Kong to access stock mar­kets on the main­land.

Ana­lysts said the surge in for­eign demand for China stocks was driven by pos­it­ive eco­nomic data pub­lished after the lunar new year hol­i­day, which had helped reas­sure some investors who had remained skit­tish about the coun­try’s growth out­look even after it began drop­ping Pres­id­ent Xi Jin­ping’s eco­nom­ic­ally dis­rupt­ive zero-Covid policy.

«It’s spec­tac­u­lar com­pared to any other year since the launch of the Con­nect,» said Frank Ben­zi­mra, head of Asia equity strategy at Société Générale.

«Some for­eign investors took a little bit more time to get cla­ri­fic­a­tion on the strength of the eco­nomic recov­ery and the policy sup­port we were going to get this year,» he added. «Eco­nomic data and devel­op­ments in the past week have under­scored our pos­it­ive out­look on China,» said Mark Hae­fele at UBS.

On Tues­day, rat­ing agency Fitch upgraded its fore­cast for China’s eco­nomic growth this year to 5 per cent, from 4.1 per cent pre­vi­ously.

«When every­body said they’d like to have a port­fo­lio without China, that was the bot­tom,» said Alison Shi­mada at All­spring Global Invest­ments. She said All­spring was now «a little over­weight» on Chinese equit­ies after increas­ing its alloc­a­tion on Octo­ber 31 — a view that was «not pop­u­lar at the time».

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  1. Clark10 February 2023 at 13:24

    I think it was a good time to do this as China has had its problems in the past months and it will take a bit of time before they get back on track. Since you could get equities at good prices, it was a good time to do so and it still is in some cases.

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    1. Joseph10 February 2023 at 15:43

      It might not have been popular on October 31 but it was the right investment to make. Whenever things are not going well in such a large economy as China's well, that's the time to buy.

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