-
Advertorial
-
FOCUS
-
Guide
-
Lifestyle
-
Tech and Vogue
-
TechandScience
-
CHTF Special
-
Nanshan
-
Futian Today
-
Hit Bravo
-
Special Report
-
Junior Journalist Program
-
World Economy
-
Opinion
-
Diversions
-
Hotels
-
Movies
-
People
-
Person of the week
-
Weekend
-
Photo Highlights
-
Currency Focus
-
Kaleidoscope
-
Tech and Science
-
News Picks
-
Yes Teens
-
Budding Writers
-
Fun
-
Campus
-
Glamour
-
News
-
Digital Paper
-
Food drink
-
Majors_Forum
-
Speak Shenzhen
-
Shopping
-
Business_Markets
-
Restaurants
-
Travel
-
Investment
-
Hotels
-
Yearend Review
-
World
-
Sports
-
Entertainment
-
QINGDAO TODAY
-
In depth
-
Leisure Highlights
-
Markets
-
Business
-
Culture
-
China
-
Shenzhen
-
Important news
在线翻译:
szdaily -> Business_Markets -> 
Foreign holdings of A shares hit record high, boosting blue chips
    2017-11-03  08:53    Shenzhen Daily

FOREIGN holdings of Chinese shares exceeded 1 trillion yuan (US$151.1 billion) for the first time in September, central bank data showed Thursday, as capital market deregulation and MSCI’s China inclusion fuelled demand for select blue chips.

Foreign holdings represent just 1.7 percent of China’s nearly US$9 trillion market capitalization, but a growing number of overseas investors are targeting companies with stable yields, or “new economy” stocks — such as consumer goods firms and drugmakers — that promise high growth potential.

“Overseas investors are attracted to A-share companies that cannot be bought elsewhere, such as Moutai, or Wuliangye,” said Shi Bin, head of China Equities at UBS Asset Management (Hong Kong) Ltd., referring to China’s popular alcohol producers.

With hundreds of billions of dollars flowing in and targeting a small number of companies, “the accumulative impact should not be underestimated,” Shi said.

By the end of September, foreign holdings in yuan-denominated A shares hit a record 1.021 trillion yuan, up 50 percent from a year earlier, the data showed. A year earlier, the figure was 656.2 billion yuan.

Foreign investor interest has heightened as China opened its capital markets wider to woo inbound investment over the past year. In December 2016, China launched the Shenzhen-Hong Kong Stock Connect, broadening a cross-market channel that already linked Shanghai and Hong Kong.

U.S. index publisher MSCI’s decision to include China’s A shares into its global indexes next year added further momentum.

“Global capital is gushing into China,” said Ma Xixun, executive director at asset manager PinPoint. “Foreign investors are realizing that being consistently bearish on China is not good for their fund performance.”

Foreign capital worth more than 300 billion yuan has so far flowed into Chinese stocks via the stock connect program, boosted by strong demand for companies ranging from home appliance makers Midea and Gree, to electricity giant Yangtze Power and diary producer Yili.

Another investment channel, the Qualified Foreign Institutional Investor (QFII) program, also showed a preference for blue chips.

The CSI300 index has risen 20 percent so far this year. In contrast, startup board ChiNext, once the darling of local investors and a hotbed for speculation, has slipped 5 percent.

Illustrating the bigger presence of overseas investors in China, Hengrui Medicine’s and liquor maker Kweichow Moutai’s top shareholder list is crowded with foreign institutions. These include among others Oppenheimer Funds Inc., Norges Bank Investment Management and Fidelity Management & Research Co.

And both these companies have seen their share prices soar more than 80 percent this year.

Investment trends are changing as a result, with the Warren Buffet-style of “buy and hold” investing becoming more popular in a market accustomed to speculative casino-like behavior, Shi at UBS Asset Management said.

“Previously, China’s A shares changed hands mainly among local investors... but with increasing foreign participation, China’s market structure is changing.”

He said the sharp rise in companies such as Moutai reflects their rapid profit growth as well as normalization of valuations from previously ultra-low levels.

“The revaluation of China’s blue chips is just under way, and is far from over.”

(SD-Agencies)

 

深圳报业集团版权所有, 未经授权禁止复制; Copyright 2010, All Rights Reserved.
Shenzhen Daily E-mail:szdaily@szszd.com.cn