In April, foreign investors returned to the Chinese stock markets, signaling a renewed interest in the Chinese market following the shock triggered by the Iran conflict. According to calculations by Bloomberg, net inflows into the Chinese mainland stock markets last month are estimated to have reached approximately 200 billion yuan (USD 29 billion), marking the highest level since January. This calculation is based on official statistics on China's total cross-border securities investment, with Bloomberg excluding multiple separately reportable fund components to estimate the approximate scale of foreign capital flowing into mainland-listed stocks.
The significant entry of foreign capital in April coincided with a broad-based rally in the technology sector. At the time, investors were more focused on productivity enhancements driven by artificial intelligence, while downplaying the impact of the Middle East situation.
Wall Street investment banks, including Goldman Sachs and Morgan Stanley, recently released research reports expressing optimism about Chinese equities. Morgan Stanley stated that, encouraged by first-quarter performance, the profit outlook for Chinese companies is expected to improve in the second quarter, with export growth and a recovery in industry sentiment set to boost corporate revenues. Morgan Stanley has set a target of 5400 points for the CSI 300 Index by the second quarter of 2027.
Goldman Sachs also recommends an "overweight" position in China and has raised its 12-month target for the CSI 300 Index to 5300 points. The CSI 300 Index rose 8% in April and has gained approximately 1.5% so far this month, currently trading around 4878 points.
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