International investors are increasing their investments in the Chinese mainland's equity markets, driven by optimism over new economic policies aimed at spurring growth and recovery.
Global hedge funds are pouring money into Chinese stocks at unprecedented levels, according to reports by Bloomberg. U.S.-based Mount Lucas Management, Singapore's GAO Capital, and South Korea's Timefolio Asset Management are among those taking bullish positions on the Chinese markets.
While the Chinese mainland's stock markets were closed for the recent seven-day National Day holiday, Chinese-related exchange-traded funds (ETFs) in Tokyo hit record highs last Friday. This reflects growing confidence among Japanese investors in China's stimulus efforts, as reported by Nikkei Asia.
Following the September meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee, which introduced additional economic measures, Goldman Sachs has issued a series of bullish reports on the Chinese stock market. The investment bank has upgraded its outlook on Chinese stocks to \"overweight\", Bloomberg reported.
Will McGough, Director of Investments at Prime Capital Financial, told Forbes, \"A massive move in a short amount of time for the world's second-largest economy, and that's going to have ripple effects lifting all emerging markets,\" referring to China's stimulus measures.
The Wall Street Journal noted that the measures have already lifted Chinese indexes and currency, European luxury stocks, global miners, and commodity prices. However, it added that China's next moves in the coming months could be crucial in determining the long-term direction of the Chinese economy.
At a press conference on Tuesday, Zheng Shanjie, head of the National Development and Reform Commission (NDRC), outlined a series of actions to further boost the economy. A key announcement was that investment projects worth 200 billion yuan ($14.14 billion) planned for next year will be released in advance this year to support local governments in accelerating preliminary work and construction.
Think tank China Finance 40 Forum stated that the government's plan to front-load the 200 billion yuan could drive a significant uptick in economic growth in the fourth quarter and help China hit its annual target of five percent GDP growth.
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Foreign investors increase bets on China as sentiments turn bullish
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