Global traders resumed buying Chinese stocks in February after an unprecedented six months of outflows, suggesting a slew of market-rescue measures from state buying to curbs on quantitative trading has had some success in restoring investors’ confidence.
They invested a net 60.7 billion yuan (US$8.4 billion) in shares trading in Shanghai and Shenzhen through the Stock Connect programme with the Hong Kong exchange last month, according to Bloomberg data. That marked the end of 201 billion yuan worth of sales from August to January.
The return of foreign buying will add momentum to the rebound in Chinese stocks from a five-year low and fuel optimism among individual investors who follow the money.
“The comeback of foreign inflows is a reflection of the improvement in confidence among investors,” said Gong Huijing, an analyst at Wanlian Securities in Guangzhou. “This will further fuel an uptick in stocks.”
