China's stock market hits a 10-year high! Foreign capital accelerates inflow, can it rise more than 10% in the future?
The Chinese stock market continues to rise under the support of the US-China trade agreement and government backing. On August 19, the Shanghai Composite Index reached a new high of 3,746.67 points, with a cumulative increase of 11%. Analysts from Goldman Sachs and JPMorgan Chase are optimistic about a growth potential of 10% to 15% in the Chinese stock market over the next 12 months, particularly in bank stocks and technology stocks. Foreign capital is flowing in rapidly, with South Korean investors focusing on leading companies in the fields of new energy vehicles, the internet, artificial intelligence, and semiconductors
Investment Insights - With the US and China reaching a trade agreement and the government strengthening support for the stock market, Chinese stocks continue to rise.
On August 19, the Chinese stock market continued to rise, with the Shanghai Composite Index surging to 3746.67 points, setting a new high since August 2015.
From the beginning of 2025 to date, the Shanghai Composite Index has accumulated an 11% increase, surpassing the 10% rise of the US S&P 500 Index. The defense, communications, and pharmaceutical biotechnology sectors have seen the largest gains.
[Source: TradingView; Shanghai Composite Index trend over the past year]
According to data from Goldman Sachs' prime brokerage division, hedge funds are buying Chinese stocks at the fastest pace since the end of June.
Goldman Sachs analysts are optimistic about the prospects of the Chinese stock market, pointing out favorable factors including improved trade prospects and market liquidity support. "With the improvement in corporate profits, the Chinese stock market still has a growth potential of 10% to 15% in the next 12 months."
JP Morgan is optimistic about Chinese bank stocks, believing that they will see an upward trend in the second half of the year. "With the improvement in net interest margins and a moderate recovery in fee income, the revenue and profit growth of the banking industry is expected to gradually improve in the second half."
Other institutions are more optimistic about technology stocks. With the rise of DeepSeek, the competitiveness of Chinese technology companies is gaining attention.
Data shows that Korean investors have net bought the top ten Chinese stocks this year, focusing on leading companies in the fields of new energy vehicles, internet, artificial intelligence, and semiconductors
