(FT) International investors using Hong Kong’s Stock connect trading scheme have accumulated RMB28 billion or $4.2 billion of mainland Chinese stocks over the past week.
The addition of Chinese equities comes as investors’ optimism starts to grow after a rough year, with Russia’s war and regulatory crackdown dampening sentiment. CSI 300 has lost17% this year, the biggest drop among other major national stock benchmarks.
Amundi Asset Management chief investment officer Vincent Mortier says that it is now time to get back to the market. He says the current weakness in price is a big change in equities.
Mortier further points out that the regulatory crackdown that hurt Chinese stocks is now cooling off. The analyst says the speculations of potential sanctions on China due to its friendship with Russia are wide of the mark.
The analysts say that despite China’s real estate sector being under strain, it is unlikely that the crisis will become a full-blown one that grips the entire economy.
Stéphane Monier of Lombard Odier is another analyst banking on Chinese stocks. He says the private bank has increased allocation to Chinese equities.
Further hopes of continued Covid restriction easing also add a bullish impetus on Chinese stocks. However, Robert St Clair, an analyst at Fullerton Singapore, warns that the external environment remains weaker despite the reopening being a catalyst for the market.
CSI 300 is up +0.16%.
