Foreign investors pour over US$10b into Chinese equities

Foreign investors net purchased more than US$10 billion (HK$78 billion) worth of onshore equities and funds in the first half of the year, reversing the net selling trend over the past two years, says China's foreign exchange regulator.

In May and June, foreign institutions bought US$18.8 billion of Chinese equities on a net basis, indicating a rising global appetite for the asset class, the State Administration of Foreign Exchange said.

Foreign holdings of onshore yuan bonds also exceeded US$600 billion, near historical highs, the regulator said.

Currently, foreign investors hold around 3 to 4 percent of the total market value of Chinese stocks and bonds, and the watchdog expects gradual increases in foreign allocations to yuan assets, citing a stable and sustainable growth outlook.

It added that amid heightened global market volatility this year, the yuan has remained stable while yuan-denominated assets have delivered relatively independent returns, making them an increasingly important tool for global investors seeking diversification and risk mitigation.

STAFF REPORTER