Chinese assets are still "undervalued"! Since October, the scale of overseas-listed Chinese stock ETFs has surged

Zhitong
2024.11.12 02:54
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Since October, the scale of Chinese stock ETFs listed overseas has significantly increased. Currently, the total scale of the five major Chinese stock ETFs listed in the United States has reached USD 29.689 billion, an increase of USD 10 billion compared to the end of September. The net inflow in October was USD 15.16 billion, indicating foreign investors' optimistic sentiment towards Chinese assets. Analysts believe that as the fundamentals of the Chinese economy stabilize and with the support of stimulus policies, capital inflows will continue. The Federal Reserve's interest rate cuts may drive the appreciation of the RMB, attracting more foreign capital. Goldman Sachs expects the potential return rate of A-shares and Hong Kong stocks to be around 20% over the next 12 months

According to the Zhitong Finance APP, since October, the scale of China-focused ETFs listed overseas has significantly increased. Data shows that the total scale of the five major China stock ETFs listed in the United States is USD 29.689 billion, an increase of USD 10 billion compared to the end of September. Meanwhile, in October, the net inflow of China stock ETFs listed overseas reached USD 15.16 billion, a figure that is notably higher than the inflow for the first nine months of this year.

Observers indicate that this development reflects an increasing optimism among foreign investors regarding Chinese assets, as their confidence in the economic outlook of China is bolstered by a series of supportive measures that have stabilized growth momentum.

Analysts suggest that as the fundamentals of the Chinese economy remain stable, and a series of stimulus policies in recent months help stabilize and support market expectations, the inflow of funds will continue. Additionally, after several years of decline, Chinese assets are still considered "undervalued," making them more attractive to foreign capital seeking investment returns. Furthermore, the Federal Reserve's interest rate cut cycle may also drive the appreciation of the renminbi, which in turn could attract more foreign capital into Chinese assets.

According to a report by Goldman Sachs, in the four weeks ending October 30, the funds flowing into global stock markets amounted to USD 63.628 billion, with a net inflow of USD 24.385 billion in the A-share market. In a report released on November 4, Goldman Sachs maintained an "overweight" rating on A-shares and Hong Kong stocks, and expects a potential return of about 20% for both markets over the next 12 months