Foreign investors appear to have regained confidence in Chinese equities since the new year, injecting a record $9 billion into mainland stocks after a dreadful 2018, the Financial Times reports.
The CSI 300, composed of blue-chip stocks in Shanghai and Shenzhen, has recovered 9% in the first six weeks of the year after losing 25% in 2018, which put it among the world’s worst performing indices.
Inflows via the Hong Kong stock link, which account for the bulk of overseas capital, had the biggest trading month to date in January, more than doubling last year’s monthly average. Investors were helped by authorities’ decision to lift the daily quota for so-called northbound flows to Rmb52 billion ($7.8 billion) last year.
“Investors are more optimistic about the US-China trade dispute,” Daniel Li, equity chief investment officer of Gaoteng Global Asset Management told the FT. “A big reason for last year’s sell-off was the US-China relationship, but now the two sides are negotiating, and markets are more optimistic about a deal.”