US$2.7 bn of global funds swarmed Chinese stocks in July, and the flow will be ‘stronger'
Chinese stocks will probably continue after the summer, as a regulatory push to boost shareholder returns, appealing valuations and rising expectations of interest-rate cuts in the US lure investors, according to Morgan Stanley.
Advertisement
The rotation back to Chinese stocks was expected to be 'stronger' after two consecutive months of net buying by global long-only funds, analysts led by Laura Wang at the US investment bank said in a report on Friday.
Long-only funds poured US$2.7 billion into Chinese stocks in July, accelerating from a net inflow of US$1.2 billion in June, the report said. That came despite holdings reductions by some large actively managed mutual funds focused on Asia excluding Japan, it said.
Shunned over the past few years, Chinese stocks are now back on the radar for global investors after trade tensions between Beijing and Washington de-escalated and the mainland's first-half economic growth exceeded estimates. Hong Kong's Hang Seng Index has gained 24 per cent this year, and the CSI 300 Index of mainland-listed shares has added almost 5 per cent.
'China, with the second-best earnings revision breadth trend and a more fair valuation compared to other markets, should once again attract additional fund flows,' Wang said. 'As we approach the Fed rate cut schedule and a higher consensus towards a weaker US dollar, global investors' willingness to allocate into non-US markets should also pick up.'
Advertisement
The bank's assessment dovetails with China's official data on foreign buying. Overseas investors bought a combined US$10.1 billion of onshore stocks and mutual funds in the first half, starting to reverse the flight over the past two years, the foreign-exchange regulator said last month.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RTHK
3 hours ago
- RTHK
Trump extends China tariffs truce for 90 days: reports
Trump extends China tariffs truce for 90 days: reports Multiple reports from the US say Donald Trump has signed an executive order pushing back higher tariff rates for another 90 days. File photo: Reuters US President Donald Trump has reportedly signed an order delaying the reimposition of higher tariffs on Chinese goods, hours before a trade truce between Washington and Beijing was due to expire. The halt on steeper tariffs will be in place for another 90 days, the Wall Street Journal and CNBC reported, citing Trump administration officials. The White House did not respond to queries on the matter. While the United States and China slapped escalating tariffs on each other's products this year, reaching prohibitive triple-digit levels and snarling trade, both countries in May agreed to temporarily lower them. But their 90-day halt of steeper levies was due to expire on Tuesday. Asked about the deadline earlier, Trump said: "We'll see what happens. They've been dealing quite nicely. The relationship is very good with President Xi (Jinping) and myself." Trump also touted the tariff revenue his country has collected since his return to the White House, saying "we've been dealing very nicely with China." "We hope that the US will work with China to follow the important consensus reached during the phone call between the two heads of state," Chinese foreign ministry spokesman Lin Jian said in a statement. He added that Beijing also hopes Washington will "strive for positive outcomes on the basis of equality, respect and mutual benefit." The full text of Trump's latest order has yet to be released. The 90-day extension means the truce is set to expire in early November, according to the Wall Street Journal. Even as both countries reached a pact to cool tensions after high level talks in Geneva in May, the de-escalation has been shaky. In June, key economic officials convened in London as disagreements emerged and US officials accused their counterparts of violating the pact. Policymakers met again in Stockholm last month. For now, the extension of a truce means that US tariffs on Chinese goods this year stand at 30 percent. Under their de-escalation, Beijing's corresponding levy on US products stood at 10 percent. Kelly Ann Shaw, a senior White House trade official during Trump's first term and now with Akin Gump Strauss Hauer & Feld, said she had expected Trump to extend the tariffs truce. "It wouldn't be a Trump-style negotiation if it didn't go right down to the wire," she said. "The whole reason for the 90-day pause in the first place was to lay the groundwork for broader negotiations and there's been a lot of noise about everything from soybeans to export controls to excess capacity over the weekend," she said. US Treasury Secretary Scott Bessent has said Washington has the makings of a deal with China and he was "optimistic" about the path forward. Trump had pushed for additional concessions on Sunday, urging China to quadruple its soybean purchases, although analysts questioned the feasibility of any such deal. (Agencies)
South China Morning Post
5 hours ago
- South China Morning Post
Gold will not face tariffs after customs confusion, Trump says
US President Donald Trump said on Monday that gold imports will not face additional tariffs, days after confusion flared on whether recent rises applied to certain gold bars – threatening to upend global trade of the precious metal. Trump's comments came after US customs authorities made public a letter saying that gold bars at two standard weights – one kilogram and 100 ounces (2.8 kilos) – should be classified as subject to duties. 'Gold will not be Tariffed!' Trump said on his Truth Social platform, without providing further details. The letter, which was made public last week and dated July 31, was first reported on by the Financial Times, sending the price of gold on the US futures market to a record high. But a White House official told Agence France-Presse on Friday that the Trump administration plans to 'issue an executive order in the near future clarifying misinformation about the tariffing of gold bars and other speciality products'. On Friday, gold for December delivery hit a record high on the Comex, the world's biggest futures market.
South China Morning Post
6 hours ago
- South China Morning Post
Trump confirms deal with Nvidia chief to let tech company sell lower-end chips to China
US President Donald Trump said on Monday that he had personally negotiated a deal with Nvidia chief executive Jensen Huang, letting the tech giant sell a lower-end chip in China in exchange for part of those sales revenues being paid to the US government. Advertisement Trump did not rule out similar deals involving less-advanced versions of the company's most high-tech chips. The highly unusual deal was first reported on Sunday by the Financial Times. The arrangement comes amid Washington's years-long push to restrict Beijing's access to cutting-edge semiconductors, a policy rooted in concerns that advanced AI processors could bolster China's military capabilities. Since 2022, Washington has imposed export controls on such chips, hitting US chipmakers hard — particularly Nvidia, the dominant player in the industry. 03:34 Nvidia CEO Jensen Huang praises China's AI progress following chip sales approval Nvidia CEO Jensen Huang praises China's AI progress following chip sales approval Speaking at a White House news conference, Trump said that the agreement centred around Nvidia's H20 chip, which he called 'obsolete' but still commercially viable.
