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Written by Alan John
LONDON (Reuters) – Investors poured about $12 billion into Chinese stock funds in the week to Wednesday, the biggest inflow since 2015 and the second-biggest on record, BofA Global Research showed on Friday. The report shows a bright spot for China’s battered stocks.
Hong Kong’s Hang Seng index rose nearly 5% this week, its best performance since July last year, and land blue-chip stocks rose as Beijing stepped up efforts to restore confidence in the world’s second-largest economy. rose 1.5%. [.SS]
The People’s Bank of China announced earlier this week that it would reduce the amount of cash banks must hold in reserves. Additionally, the Chinese government announced measures to ease liquidity shortages facing struggling real estate developers, with media reporting a 2 trillion yuan ($278.53 billion) bailout package for stock purchases. is reported.
Investor concerns about China’s economy, particularly its struggling real estate sector, have seen domestic Chinese blue-chip stocks trading near five-year lows, with Hong Kong’s benchmark also trading at its lowest in more than a year. The background is that
Some investors say the stock market crash is worth betting on an eventual rebound and perhaps a new investment approach to the market.
Analysts at BofA said the plunge in Chinese real estate stocks has made the country “the world’s most attractive long contrarian ‘trade,'” adding, “No one believes it’s an ‘investment.’ No,” he pointed out.
BofA, citing data from fund flow and asset allocation data provider EPFR, said investments in equity funds totaled $17.6 billion and bond flows totaled $14.2 billion in the week to Wednesday.
Meanwhile, U.S. stocks hit new highs, led by tech stocks, as the AI ”baby bubble” expands, according to a BofA note.
According to the note, inflows into tech stocks were $2.8 billion for the third straight week, the most since last August.
Many of these stocks are off to a strong start to the year, with high-tech and technology-related sectors driving the S&P 500’s 24% gain in 2023.
BofA added that weekly inflows into emerging market (EM) equities hit a record high of $12.1 billion, with outflows from emerging market debt markets marking the third consecutive week.
The bond market has recorded inflows over the past five weeks, with inflows into government bonds reaching nearly $5 billion in the past two weeks, the report said.
(Reporting by Alun John; Writing by Dhara Ranasinghe; Editing by Mark Heinrich)
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