Foreign buying of Chinese stocks continued for a third month in August, albeit at a slower pace, as long-only funds increased their exposure to the mainland’s $12.3 trillion stock market following a key benchmark’s rise to a 10-year high, reports the South China Morning Post. Inflows from US and European funds into Chinese equities eased to $900 million in August from $2.7 billion in July, according to a Morgan Stanley report on Thursday. Passive funds logged inflows of $1.4 billion. Meanwhile, active funds recorded outflows of $500 million, the lowest since mid-2023.
The numbers brought the year-to-date cumulative foreign long-only fund inflows to $1 billion compared with outflows of $17 billion a year earlier.
“We observe stronger engagement from high-net-worth investors [in onshore private funds], alongside early signs of rotation from money market funds to equity funds,” Morgan Stanley said in the report. “Retail activity picked up slightly but remains well below previous peaks.”