Foreign inflows to Chinese stocks will probably continue after the summer, as a regulatory push to boost shareholder returns, appealing valuations and rising expectations of interest-rate cuts in the US lure investors, according to Morgan Stanley.
The rotation back to Chinese stocks was expected to be “stronger” after two consecutive months of net buying by global long-only funds, analysts led by Laura Wang at the US investment bank said in a report on Friday.
Long-only funds poured US$2.7 billion into Chinese stocks in July, accelerating from a net inflow of US$1.2 billion in June, the report said. That came despite holdings reductions by some large actively managed mutual funds focused on Asia excluding Japan, it said.
Shunned over the past few years, Chinese stocks are now back on the radar for global investors after trade tensions between Beijing and Washington de-escalated and the mainland’s first-half economic growth…
