Recently, the news that foreign institutions are collectively bullish on China's stock market has aroused heated discussions.
Schroder Fund Management (China) Co., Ltd. said that now China's economy is gradually recovering, and the international financial situation is slowly improving, and everyone generally expects that funds will be more abundant in the future. In this case, we believe that the opportunities outweigh the risks of investing in Chinese equities, and now may be a good time to invest.
AllianceBernstein believes that A-shares and Hong Kong stocks are currently in a valuation depression, with huge market capitalization and sufficient liquidity, which is expected to become one of the important markets for international investors to diversify risks.
Ray Dalio, the founder of Bridgewater Fund, the world's largest hedge fund, recently published an article on social media, saying: Some of the problems and risks facing China are controllable, and the policy direction is correct. The key question is not whether we should invest in China, but how much.
According to a recent report released by Morgan Stanley, global funds are accelerating their return to the Chinese stock market.
More than 90% of emerging market funds are adding to China's stock market in the latest month, according to the latest data from HSBC Holdings.
Institutions are not only bullish, but also doing more with practical actions.
For example, Standard Chartered Securities, the first wholly foreign-owned securities firm in China to be approved for the establishment of a new wholly foreign-owned brokerage, announced its official opening on March 22 this year.
Others, such as Citigroup, Mizuho Securities, and BNP Paribas Securities, lined up and waited to enter.
In addition, since the beginning of this year, a number of international asset management giants, including Hanling Capital, Brookfield, KKR, etc., have rushed ahead of schedule and landed in China.
On May 4, Goldman Sachs published an article titled "Yes, the China deal is back!" The article triggered a strong response from the market.
According to EPFR data, as of the end of March this year, the allocation of global mutual funds to Chinese equities totaled 5.2%, which is an extremely low level of positioning in the past decade.
More than a month ago, foreign-funded institutions were collectively pessimistic, why are they suddenly so optimistic now?
The main reasons are as follows.
First of all, since last year, foreign media and institutions have been full of pessimistic expectations for the future of China's economy.
As a result, in the first quarter of this year, the mainland's economic growth rate was as high as 5.2%, exceeding the forecasts of almost all mainstream institutions.
Subsequently, a number of institutions have raised their forecasts for China's economy this year.
Second, China's stock market is currently at the bottom of the valuation range, and the opportunities far outweigh the risks.
In addition to A-shares and Hong Kong stocks, none of the stock markets of major countries in the world have not skyrocketed.
Needless to say, the Indian stock market has risen by more than 270% in the Indian SENSEX30 Index from 2013 to 2023.
Even the Japanese stock market, which is a pool of stagnant water, has risen to make people doubt their lives.
Just when the global stock market was singing and dancing, A-shares fell by more than 2,600 points, and Hong Kong stocks fell back to 2007.
Risks go up, and opportunities go down.
Under the continuous plunge, as long as it is a reasonable investor, it will consider A-shares and Hong Kong stocks.
Finally, it is the regulators who have struck hard to crack down on all kinds of suspected illegal operations and quantitative transactions.
Financial markets, above all, are fair, transparent and stable.
Regulators have adopted a zero-tolerance approach to insider trading, market manipulation, misrepresentation and other violations to get the market back on track.
These three reasons have made foreign institutions smell the huge opportunities contained in China's stock market, and they invariably sing long and long China's stock market.
Recently, A-shares have returned to 3,100 points, and the Hang Seng Index has risen by more than 20% in less than two months, which is the best proof of this.
A number of foreign-funded institutions have thrown out research reports, and China's stock market is expected to rise by 20%~40% in the next two years.
Many shareholders disagreed: who to look down on? It has fallen for a few years, and it has risen by 40% in two years?
As the saying goes, a bear market does not speak to the bottom, and a bull market does not speak to the top.
These foreign institutions still underestimate the potential of China's stock market.
Judging from historical data, Big A either has no cow or is a mad cow, which is short in time and strong in its outbreak.
On October 3, 1991 ~ January 17, 1992, the Shanghai Composite Index rose for 76 consecutive years, and the current round of bull market rose by 68.45%.
On May 6, 1992 ~ May 25, 1992, the Shanghai Composite Index rose for 14 consecutive years, and the current round of bull market rose 241.55%.
On August 20, 1997 ~ September 1, 1997, the Shanghai Composite Index rose for 9 consecutive years, and the current round of bull market rose by 165.64%.
On April 2, 2007 ~ April 12, 2007, the Shanghai Composite Index rose for 9 consecutive years, and the current round of bull market rose by 87.30%.
On March 11, 2015 ~ March 24, 2015, the Shanghai Composite Index rose for 10 consecutive years, and the current round of bull market rose by 56.99%.
The question is, do you think this bull market will rise by more than 241.55% in 1992?
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