Trucks and passenger cars drive across the Sutong Bridge in the city of Suzhou near Shanghai on Jan. 27, 2023, during the Lunar New Year holiday.
Future Publishing | Future Publishing | Getty Images
BEIJING — Money is flowing into mainland Chinese and Hong Kong stocks in ways not seen since 2018, according to research firm EPFR Global.
Active foreign fund managers put $1.39 billion into mainland Chinese stocks in the four weeks ended Jan. 25, EPFR data showed. Active fund inflows into Hong Kong stocks were even greater during that time, at $2.16 billion.
“Active managers have never been this positive toward China markets in the past five years,” said Steven Shen, manager of quantitative strategies at EPFR.
“In the very short term we should be expecting more inflows from the active managers,” he said, pointing to factors such as China’s reopening from zero-Covid. EPFR says it tracks fund flows across $46 trillion in assets worldwide.
Active money managers are more involved with picking portfolio investments, while passive money managers tend to follow stock indexes.
The Shanghai composite gained more than 5% in January, the most since a surge of nearly 9% in November, according to Wind Information. The Hang Seng Index climbed by more than 10% in January, a third-straight month of gains.
The money is coming in faster than it did in early 2022, Shen said. At the time, a few institutional investors had said it was time to buy Chinese stocks due to Beijing’s emphasis on stability in a politically important year.
Back then, local investors had been more cautious. The highly transmissible omicron variant and China’s zero-Covid policy subsequently locked down the city of Shanghai for two months, while constraining business activity in much of the country. In 2022, GDP grew by 3%, one of the slowest paces in decades.
China abruptly ended its increasingly stringent Covid controls in December. Tourism, including travel abroad, rebounded during the Lunar New Year in late…
Read the full article here
