China - Market Strategy 06 (Jul 24 - Dec 26)

[behappyalways]

Hedge funds tailor win-win bets on China
https://www.reuters.com/markets/asia/he ... 025-02-19/

[winston]

Foreign Funds Interest in CN Boiling Up;
G Sachs Predicts US$200B+ Fund Inflow;
JPM Asset Mgmt: Dozens of Meetings/ Day at SH Office

The rise of DeepSeek galvanized market optimism about China's growth and stock performance.

According to a CCTV report, Morgan Stanley predicted that global investors' focus on Chinese assets will persist for some time.

Separately, Goldman Sachs released a research report foreseeing that China's promising economic growth prospects, combined with a potential boost in confidence, could bring in more than US$200 billion in portfolio capital inflows.

In addition, the report quoted J.P. Morgan Asset Management as saying that it learned through communication that investors in the Middle East, Europe, the United States and other emerging markets are now increasingly interested in the Chinese market.

The report said that the broker's Shanghai office had dozens of discussion meetings covering various Chinese industries every day from 8:30 a.m. to midnight.

Source: AAstocks.com

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

After a Yearlong Fall, These Stocks Are Rebounding

by Sean Michael Cummings

Chinese stocks have been falling since 2018. But after finding a bottom in 2024, they’re forging higher today.

RedNote is improving American sentiment toward China. And it’s laying the groundwork for a big turnaround in Chinese stocks this year.

This is likely to be one of the year’s biggest financial narratives. If you don’t have any exposure to China, I encourage you to change that today.

Source: Daily Wealth

https://dailytradealert.com/2025/02/25/ ... ebounding/

[winston]

Chinese stocks’ next leg up hinges on return of global funds

By John Cheng

Despite a 12% gain in the MSCI China Index last month, active funds have continued to sell shares in a sign of further scepticism about the long-term outlook of the market.

Foreign inflows this year have been driven by passive money, as well as a rotation within Asian and emerging market portfolios.

“Global institutional investors continue to shun China, especially given the threat of Trump 2.0”.

“They are waiting for more numbers to show the Chinese economy is indeed improving.”

Foreign investors’ exposure to China remains at historical low. Their aggregate allocation to China was at 5.9% as of end-January compared to a peak of more than 14% in 2020.

Source: Bloomberg

https://theedgemalaysia.com/node/747647

[winston]

China’s Retail Investors Pile Into New Funds as Stocks Rally

Equity mutual funds raised 56.4 billion yuan ($7.8 billion) in the first two months of the year, a five-fold increase from the same period last year and the biggest amount since 2021.

The number of such funds launched also jumped 76% year-on-year.

The tech-heavy STAR50 Index climbed more than 9% in the January-February period, while a gauge of tech shares listed in Hong Kong surged nearly 25%.

Hybrid funds dropped by 38% in the first two months of 2025 compared to a year ago, while the number of bond funds fell by 29%, according to the data.

The moves were “driven by a combination of the bottoming of long term domestic bond yields and increased optimism in China equities driven by greater confidence in the long term outlook of China’s tech sector”.

Source: Bloomberg

https://finance.yahoo.com/news/china-re ... 31999.html

[winston]

It’s Time to Take Profits on China

by Jeff Clark

It’s time to get out of China. Not quite four months ago, we said it was a good idea to follow Wall Street’s bigwigs into the Chinese market.

First off, investor sentiment (a contrary indicator) has done a complete reversal – from wildly bearish to overwhelmingly bullish.

The risk/reward setup for buying China right now is unfavorable. Traders who bought Chinese stocks on our suggestion in November should take some profits off the table.

Source: Jeff Clark Trader

https://dailytradealert.com/2025/03/17/ ... -on-china/

[winston]

Stocks face correction, warns BofA

China's stock rally may face a "meaningful correction soon" given its similarities with the 2015 boom and bust cycle.

BofA said long-only investors on the mainland are getting nervous as they worry about a lack of improvement in jobs, deflation, and credit demand while the impact from geopolitical tensions has been overlooked.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... warns-BofA

[winston]

Unlocking hidden opportunities in Chinese equities

The Nasdaq Golden Dragon China Index which tracks US-listed Chinese companies has risen 16.9 per cent year to date

by Aaron Chwee

Trump’s stricter regulatory stance and foreign policy approach may heighten the risk of delisting for Chinese companies on US exchanges, further eroding investor confidence and shaping market sentiment.

When it comes to China, invest strategically. While the potential returns over the next six to 12 months appear promising at first, the landscape remains volatile. Investors should be prepared for sharp drawdowns and price swings, as market sentiment can shift rapidly in response to international developments.

It is advisable to refrain from deploying all of one’s capital at once. A staggered investment approach, allocating smaller amounts over a period of three months or more, can help average out costs and reduce the impact of market volatility.

Source: Business Times

https://www.businesstimes.com.sg/wealth ... e-equities

[winston]

UBS's Wang Zonghao: Continued Earnings Recovery Will Support Sustained Rally in CN Stock Mkt

As of now, over 50% of MSCI China Index-listed companies have announced their FY24 results.

Overall, UBS saw a clear recovery in revenue momentum, with 4Q revenue growing by 3% YoY, compared to -1% in previous quarters, said Wang Zonghao, Head of China Equity Strategy Research at UBS Investment Bank.

In Wang's opinion, the industries with the strongest earnings and revenue trends in 4Q included the internet industry, healthcare (due to new drug releases and a low base) industry, and non-bank financials (due to stock market recovery) industry.

If the current earnings recovery trend continues, UBS Investment Bank estimated that it would support a sustained rebound in the Chinese stock market.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

China/HK Market Strategy: FY24 results: Improving earnings and business confidence

CN/HK stocks saw fewer misses in FY24 results season compared to 1H24

More managements turned optimistic on business outlook

Results season outcome enhances CN/HK’s relative appeal vs. other markets

Reiterate our positive stance on market and preference for tech sectors

Source: DBS

https://www.dbs.com/insightsdirect/coun ... ecid=24633