Despite a global coronavirus pandemic that began in China, 2020 has transformed into the year it all came together for the country’s capital markets, as foreign investors snapped up more than RMB 1 trillion worth of stocks and bonds, reported the Financial Times.
China’s benchmark CSI 300 index is up about 27% this year, in dollar terms, beating the S&P 500 by more than 13 percentage points. Shenzhen’s tech-focused ChiNext has risen some 59%, on the same basis, exceeding even the runaway US tech benchmark, the Nasdaq Composite. Chinese government bonds have also drawn new fans with their rare source of yield.
The $150 billion-worth of inflows, which came through Hong Kong programs that connect investors to the mainland, mark a contrast with January, when Chinese stocks were the first in the world to feel the heat from the pandemic. Investors say the surge is likely to keep coming, reported the FT.
“I’ve been in Asia for 20 years and for most of that time period it’s been pretty challenging to get investors to look at the onshore market,” said Kenneth Akintewe, head of Asian sovereign debt at Aberdeen Standard Investments.