Foreign investors expected to eye more China A shares – but pace set to ease: analyst
Foreign investors are expected to keep adding to their China A-share holdings, though the pace of buying is likely to slow from the surge in the first half of the year, according to a UBS analyst. “We still expect net inflows in the second half, but the pace will be somewhat slower than in the first half,” said Meng Lei, China equity strategist at UBS Securities, at UBS’s annual China A-share…
UBS analyst Meng Lei anticipates foreign investors will continue accumulating China A-share holdings, albeit at a slower pace than the first half of the year. Foreign appetite for A shares surged to over 4.4 trillion yuan by the second quarter of 2023, with global fund managers expanding positions in companies related to AI supply chains and green energy.
However, macroeconomic headwinds, such as tech stock pullbacks and rising US Treasury yields, are dampening foreign capital inflows. Despite these pressures, Meng remains optimistic about net inflows persisting, citing China's push for technological self-sufficiency as a key driver. The strengthening yuan and the appeal of Chinese exporters and high-end manufacturers are also expected to draw foreign investment.
While a possible rotation into consumer stocks could occur, it will require clearer signs of rising household wages and a stabilization in the domestic real estate market.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
