Chinese assets staged an epic counteroffensive.
Stimulated by a series of blockbuster favorable policies, the sentiment of funds to long Chinese assets is continuing to be high. The Shanghai Composite Index rose from 2,700 to 3,000 points in only 3 days; Today's intraday GEM index soared by more than 12%, the largest increase in intraday history.
There are various signs that this round of A-share bull market has started the momentum, and major institutions have also unanimously given bullish opinions.
At present, foreign investors' attitudes towards Chinese assets are also undergoing a major reversal. Wall Street legend David · Tepper recently said he was buying "everything" of assets linked to Chinese stocks.
While foreign capital is optimistic, it has begun to frantically sweep Chinese assets. At the close of U.S. stocks overnight, Chinese asset ETFs soared across the board, and Chinese concept stocks also rose crazy, with the Nasdaq China Golden Dragon Index closing up 10.85%, a new high since May.
There are signs that China's asset values are undergoing a complete revaluation.
China's assets are on the offensive
Stimulated by a series of blockbuster favorable policies, the sentiment of funds to long Chinese assets is continuing to be high.
On September 27, after the opening of A-shares, funds poured into the market, and the GEM index once soared by more than 12% in intraday trading, creating the largest increase in intraday history, among them, Oriental Fortune soared by 19.7% intraday, and CATL rose by more than 12%.
In terms of sectors, the old track broke out collectively, new energy and pharmaceutical stocks soared across the board, EVE Lithium Energy, Risen Energy, Capchem, Aimeike and other stocks rose by more than 10%, and Tianqi Lithium and Ganfeng Lithium had a strong daily limit; Hong Kong stocks WuXi AppTec soared by more than 25% intraday, and A-share WuXi AppTec rose by the limit.
The real estate, liquor, and financial sectors also broke out collectively, Vanke A and Wuliangye rarely had continuous daily limits, and Kweichow Moutai rose by more than 5%. In terms of individual stocks, more than 5,200 stocks in the whole market rose, and incremental funds are pouring into the market.
Stock index futures also soared across the board, with stock index futures such as the Shanghai Stock Exchange 50 and CSI 300 rising by more than 5%, and the CSI 500 and CSI 1000 stock index futures soaring by more than 8%, and the stock index futures were even more rare and sharply premium.
The continuous surge in China's assets is closely related to a series of big positives from the regulator:
On September 24, the People's Bank of China, the State Administration of Financial Supervision and the China Securities Regulatory Commission collectively launched many heavy policies such as RRR reduction, interest rate reduction, and stock loan reduction, and even involved the unprecedented central bank access to the market, which is rare in history.
On September 26, the highest decision-making level held a meeting, emphasizing the need to vigorously guide medium and long-term funds into the market, open up social security, insurance, wealth management and other funds into the market, and once again set the tone to strive to boost the capital market.
There are various signs that the current round of A-share bull market has started the momentum, and major institutions have unanimously given bullish opinions.
Late at night on September 26, CITIC Securities Research published an article "Dry" on the official WeChat, which pointed out that the September Politburo meeting was a rare analysis of the economic situation, the lifeblood of the country, involving fiscal, monetary, capital market, employment, private economy and other areas of policy.
The article points out that the signal is clear, and it can be summed up in one word: dry! Dry words first, unite as one. Believe in your own country, believe in yourself. In fact, every ordinary person is the backbone of China. Taking responsibility and forging ahead is the most pragmatic feeling of family and country among the Chinese. The National Day is approaching, praise for the country, and remember to order one for yourself, not afraid of difficulties, not lying flat, running every small family, and supporting the whole country together.
Chen Guo, chief strategy officer of China Securities Securities, also said that the trend of A-shares and Hong Kong stocks is expected to go to a higher level, and the main index of the A-share market is expected to challenge the judgment of the year's highs in May.
Wang Yi, chief strategy officer of Huatai Securities, said that A-shares and Hong Kong stocks will usher in improved liquidity, with the large market outperforming the small cap and the large-cap growth outperforming the value of the large-cap.
According to the latest research report released by CICC, in the real estate sector, the meeting emphasized that "it is necessary to promote the real estate market to stop falling and stabilize", and the signal is of clear significance. In the current context of weak real estate sales and investment, the positive statement of this meeting on the real estate sector has strong signal significance and helps to boost market confidence.
Foreign capital buys up
It is worth noting that there has been a significant reversal in foreign attitudes towards Chinese assets. Wall Street legend ·David Tepper said in his latest statement that the Chinese government's policy has undergone a "complete shift" in the past week, with "heavy" policies to support economic growth.
Tepper said he could double his investment limit on Chinese stocks. He also added that he was buying "all" assets linked to Chinese stocks that he could buy.
Tepper also noted that stocks in the Chinese market are cheaper than United States stocks.
Tepper has become one of the prominent Chinese equity bulls among hedge fund investors. He has aggressively increased his holdings in Chinese stocks in the first quarter of 2024, especially Alibaba, which has more than doubled its stake. At the time, state-backed funds ramped up their purchases to prop up the market, and Tepper took advantage of the market correction to significantly increase its holdings in Chinese stocks.
Goldman Sachs is also very optimistic, with the agency saying that Chinese stocks have been strong in recent days. The long-awaited recovery in China's stock market may finally be here, and if so, investors should want to be a part of it.
Goldman Sachs data showed that its top brokerage business saw its biggest one-day buying spree since March 2021 and the second-highest on record, following high-level announcements of blockbuster policy measures.
Wang Zonghao, head of equity strategy research at UBS China, said that the latest policy package is good for the stock market as a whole, considering the potential incremental capital inflows, the increase in the scale of share buybacks, and the further improvement of corporate governance in the long term.
While hedge funds' exposure to Chinese equities increased sharply this week, it remained below all-time records, hovering near five-year lows compared to highs in 2023 and early 2020, bank data showed. It means that the potential room for foreign capital to increase their positions is still very large.
While foreign capital is optimistic, it has begun to frantically sweep Chinese assets. At the close of U.S. stocks overnight, Chinese asset ETFs soared across the board, including 3x long FTSE China ETF-Direxion soared 25%, 2x long CSI China Internet Stock ETF-Direxion rose more than 24%, 2x long CSI 300 ETF-Direxion, 2x long FTSE China 50 ETF-ProShares rose nearly 17%, and kraneshares China Overseas Internet ETF rose 12%. China's large-cap ETF-iShares rose more than 8%.
At the same time, Chinese concept stocks also rose wildly, with the Nasdaq China Golden Dragon Index closing up 10.85%, the highest since May. Fang Duoduo soared by 114%, Monster Charging rose by more than 31%, Gaotu, Good Future, and Shell rose by more than 20%, iQiyi, Bilibili rose by more than 15%, JD.com, New Oriental rose by more than 14%, Pinduoduo rose by more than 13%, Xiaopeng Motors rose by more than 11%, Ctrip, Vipshop, Alibaba rose by more than 10%, Full Bang, Baidu rose by more than 9%, Tencent Music rose by more than 8%, Li Auto rose by more than 6%, and NetEase rose by more than 4%.
There are signs that China's asset values are undergoing a complete revaluation.
In the face of an epic counteroffensive, how should ordinary investors choose the right investment target?
For individual investors, it may be a good choice to choose the right index fund to participate, especially in the early stage of the counteroffensive, when the certainty of the index's rise is relatively higher.
Risk Warning: The views in this article are for reference only. The constituents mentioned are not recommendations, and index funds have tracking errors. Please carefully read the "Fund Contract", "Prospectus" and other legal documents before purchasing, and choose a product that suits your risk tolerance. There are risks in the market, and you need to be cautious about investment.