Foreign investors rally behind China's undervalued stocks

Billions of dollars are flowing into Hong Kong’s Yuan-denominated exchange-traded funds as offshore investors rally behind China’s undervalued stocks, Reuters reported, citing data from researcher Morningstar. As a scheme to allow more foreign inflows into Chinese stocks draws near, fund managers are wagering on a sustained rebound for the Shanghai Composite Index .SSEC after a prolonged four-year slump has opened up opportunities to buy on the cheap stocks. ETFs under the Renminbi Qualified Foreign Institutional Investor (RQFII) posted significant net inflows of RMB8.2 billion (US$1.33 billion) last month, the highest since December 2012 and nearly doubling from June.