Bloomberg: Investors Returning to China After Worst Phase

Bloomberg reported on the 7th that global investors are returning to China.

Chinese Yuan. / Photo by Yonhap News

According to the report, investors are moving away from a wait-and-see stance on the Chinese economy and see it as "time to invest." The Chinese stock market is experiencing a rally worth $2 trillion (approximately 2,700 trillion KRW). Currently, the Morgan Stanley Capital International (MSCI) China Index has risen 24% from its low point in January.

At the beginning of the year, there were many concerns about the Chinese economy. The entrenched real estate crisis, ineffective economic stimulus efforts, and escalating tensions with the United States led investors to withdraw or reduce investments in China.

However, the situation has recently been changing. Investors believe that the worst is over as the outlook for the Chinese economy improves and new government measures to support the housing market are implemented.

The market value of Chinese and Hong Kong stocks has increased by about $2 trillion since the low point in January, and China is outperforming among emerging markets. Regarding the recent pause in the rebound, Goldman Sachs expressed the view that this is not a new low but a better entry point.

Following the UK’s SG Kleinwort Hambros, which had hesitated on Chinese investments but has now shifted towards "overweight," Swiss asset manager Vontobel, Soci?t? G?n?rale (SG), and Ariel Investment have also joined this trend. On Wall Street, UBS issued an "overweight" rating on major Chinese stock indices in April. In fact, the iShares MSCI China ETF saw its first weekly inflow last month this year, amounting to $6 billion (approximately 8.2 trillion KRW).

However, not everyone is confident about the Chinese market. According to JP Morgan, some hedge funds have taken profits from the recent rally in real estate developer stocks, while others are betting on a decline in these stocks.

Marbrouk Chettouane, Global Market Strategy Head at French investment bank Natixis, said, "Investors are very reluctant to be exposed to the Chinese economy," adding, "The fact that the government changes rules from the start is a real risk."

This content was produced with the assistance of AI translation services.