Chinese Stocks Set for First Annual Gain Since the Pandemic
Chinese stocks are on track for their first yearly gain since the pandemic, signaling a potential recovery in the market.
Chinese Stocks, Beijing, CSI 300 Index, Market Recovery, Investors
Beijing: Chinese stocks are finally bouncing back, aiming for their first annual gain since the pandemic hit. The CSI 300 Index has jumped nearly 17% since the end of 2023, breaking a tough three-year losing streak. Meanwhile, stocks listed in Hong Kong have surged 27%, marking their biggest yearly rise since 2009. In contrast, the MSCI Asia Pacific Index has only seen an 8% increase this year.
This positive shift is a breath of fresh air for investors who have been waiting for a turnaround. After years of disappointing performance, there’s a growing sense of optimism. Beijing has rolled out some bold policies to revive the economy, and it seems to be paying off.
Zhao Zhonghua, an investment manager, believes there’s still plenty of room for growth in China’s stock market. He thinks the policies introduced since September are solid and will attract more investments next year, even if there are some bumps along the way.
Recently, investors poured about $5.6 billion into Chinese equity funds, the largest inflow in nine weeks. Plus, there was a surge in new trading accounts created in October, the highest since mid-2015. However, the enthusiasm dipped a bit in November.
The market’s recovery has been a long time coming. After a series of half-hearted attempts to boost growth, the CSI 300 Index has soared 24% since late September, thanks to a comprehensive package of measures from the government.
In December, the Politburo announced a shift to a “moderately loose” monetary policy, the first change in 14 years, and promised to ramp up fiscal measures for the coming year.
Still, some caution lingers. Interest in stock-focused mutual funds has dipped as bonds are becoming more appealing. While equity products still raised more money than bonds, the latter saw significant growth.
To keep this momentum going, China needs to tackle some ongoing issues, like the property market slump and weak consumer confidence. Everyone’s now looking forward to the National People’s Congress in March, hoping for more detailed policies to support growth.