A-shares were attracting more capital flows and investment institutions ahead of their inclusion into the MSCI indexes, as reported by the Shanghai Securities News on Friday.
During the past two months, overseas investors were building up stakes in the A-share market via its two stock-connect programs with Hong Kong.
In April alone, net purchases by these investors jumped to a monthly total of RMB 38 billion.
Cash flows were pouring into offshore funds that targeted the Qualified Foreign Institutional Investors (QFII) program and the overseas-listed Chinese shares.
These funds saw net capital inflows for nine weeks during the past two and a half months. In the first four months of 2018, they received an aggregate of USD 8.25 billion, according to data from EPFR Global, a provider of information on fund flows and asset allocations.
Overseas institutions were also actively preparing for the entry of the A-shares into the MSCI benchmark indexes.
A spokesperson of JPMorgan Asset Management (Shanghai) Limited said this company has decided to cover 250 A-share companies by the end of 2018, up from the present figure of 134, a move aimed at enabling more detailed analysis of these firms.
Krane Funds Advisors, LLC, an investment management firm, was running roadshows in eight cities across America to let investors know about the opportunities from the Chinese stock market.
Other factors were also contributing to such enthusiasm.
China’s tightening of credit plus its resilience against the predicted hard landing had put confidence in the investors, Cameron Brandt, EPFR Global’s senior analyst, told the above media.
Investors see positive factors in China’s reforms in the short term and predict more investment opportunities as it tightens the rein over capital, he believed.
A study by JPMorgan Asset Management (Shanghai) Limited uncovered huge investment opportunities in the A-shares market, pointing to a fact that 993 shares in the Chinese stock market saw a trading volume of USD 10 million every day versus a total of 648 shares in all other emerging markets.
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