Fund managers return to China: turning point in the stock market?

Fund managers return to China: turning point in the stock market?

International investors recently recorded a mass withdrawal from the Chinese stock market. Fund managers appeared to be turning their backs on China as confidence in the market weakened. Financial experts observed an increased focus on emerging markets outside of China, such as India, Saudi Arabia and Mexico. China seemed to be losing its attractiveness as an investment destination, while other countries with promising growth prospects were in focus.

Despite these initially negative signals, the situation on the Chinese markets appears to be stabilizing again. HSBC analysis points to challenges that could impact growth in China. Still, according to HSBC's Herald van der Linde, there are signs of improvement compared to last year. Domestic confidence must improve and the focus is on moderate and sustainable growth in the economy and corporate profits.

Despite some obstacles such as the withdrawal of pension funds from the US and political decisions that weighed on the market, international fund managers appear to be showing increasing interest in China again. A report from HSBC revealed that many funds increased their China exposure last month. The shift and flows in the market suggest that both Chinese and international funds are returning. Although sentiment is still fragile, there is potential for a positive development that could boost confidence in the Chinese stock market.