Recently, foreign capital has continued to flow into China’s capital market, which has been recovering strongly. Overseas ETFs that track China Concept Internet stocks have increased their holdings of large amounts of funds, and the active management of ETF real money under the asset management giant Capital Group has continued to increase its positions in Chinese stocks.

Foreign institutions said that the impact of the epidemic on China’s economy may have bottomed out, and the pace of market recovery depends on the progress of resumption of work and production and the progress of specific measures to stabilize growth.

Zhongjian Internet stocks attract gold again

Recently, many Chinese Internet stocks have rebounded strongly. Since May, Meituan-W has risen by more than 15%, and the stock prices of JD.com and Alibaba ADR have all achieved positive returns. Didi’s share price hit a low of $1.37 per share on May 12, and has since rebounded in shock. As of the close of U.S. stocks on June 6, Didi’s share price was reported at $2.30 per share, up more than 24%.

With the gradual recovery of the market, the KraneShares China Internet Index ETF (KWEB) has seen a net inflow of US$490 million since May, making it the second most profitable index fund among ETFs tracking emerging market stocks. The KraneShares China Concept Internet Index ETF is currently the largest overseas Internet China Concept Stock ETF. The top five heavyweight stocks include Tencent Holdings, Alibaba-SW, JD.com, Baidu, and Meituan-W.

In addition, the actively managed ETF under the US capital giant Capital Group has recently increased its positions in a number of Chinese stocks. Specifically, the International Focus ETF (CGXU) has continued to increase its holdings of Kweichow Moutai, WuXi Biologics, WuXi AppTec, ENN Energy, and Inovance Technology, and the number of shares it has held since the end of March has doubled. Another actively managed ETF that holds Chinese stocks, the Global Growth Equity ETF (CGGO), also increased its holdings of Kweichow Moutai and China Ping An. Among them, the ETF’s holdings in Ping An increased from 60,500 shares at the end of March to 159,000 shares.

6 trillion European asset management giant settled in Shanghai

In addition, European asset management giants settled in Shanghai to increase their Chinese business. Recently, AXA Private Equity Fund Management (Shanghai) Co., Ltd. has completed the registration of Wholly Foreign Owned Private Equity Fund Manager (WOFE PFM) with the Asset Management Association, becoming the 36th foreign private equity fund to enter the Chinese market.

As a global asset management company, AXA Investment Management has offices in more than 22 locations around the world and a team of more than 2,400 people. As of the end of last year, the agency’s management scale exceeded 887 billion euros, equivalent to over 6 trillion yuan.

AXA Investment Management has expressed its long-term bullishness on Chinese green bonds. The agency published a research report in the first half of this year, pointing out that China’s green bond market is booming and the scale is staggering. The appeal is huge for ESG investors around the world. ESG-themed investment in China has become a common practice and is strongly supported by policies. Therefore, any investor looking to achieve excess returns from green investments cannot ignore China.

Foreign investment sings more about China

Driven by the orderly resumption of work and production in many places, the A-share and Hong Kong stock markets have ushered in a rebound, and the voice of foreign investment in China is getting stronger.

Zhao Yaoting, global market strategist at Invesco Asia Pacific (excluding Japan), said that China’s May PMI data performed well. He is increasingly convinced that the impact of the epidemic on the Chinese economy may have bottomed out.

Tang Qizhi, China research strategist and head of Hong Kong research at Julius Baer Private Bank, pointed out that the resumption of work and production may have made substantial progress, which is crucial to the recovery of economic growth. At present, the mainland and Hong Kong markets have rebounded from low levels, and the pace of recovery depends on the progress of resumption of work and production and the progress of specific measures to stabilize growth.

Deng Qizhi emphasized that some industries will perform well in the short term, including the Internet, automotive and consumer sectors. The rebound in the Internet sector is expected to be even greater.

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