To The Moon

Foreign direct investment has been net outflow in China as overseas investors withdrew $11.8 billion out of the country between last July and September, after business confidence was shaken by deflation and weak demands as the Chinese economy struggles to regain footing in the aftermath of the zero-Covid policies. Recovery was not helped by subsequent repeated crackdowns on its technology sector and a deepening debt crisis that has plagued the property scene in the country.

Fundamental investors were not rewarded for their beliefs of deep valuations of the Chinese stocks, as the cheaps became cheaper. So drastic has been the retreat of foreign investors that the Chinese government has recently been seen contemplating measures to stabilise the market.

The market has heaved a sigh of relief recently on news that a $280 billion government rescue plan is actively being considered, followed by an unexpected trim of the bank reserve ratio cut. It appears that the authorities are growing anxious to stem the stock market rout with investors betting on policy support rather than fundamentals.

It is still early days whether market confidence will be restored and if the rebound in the stock market is short-lived or the beginning of sustainable growth, as investors are anxiously awaiting further details on China's market stimulus plans. Meanwhile, with the God of Fortune approaching and many receiving their bonuses, perhaps the Chinese tech titans $Alibaba(BABA)$  , $Pinduoduo Inc.(PDD)$  , $TENCENT(00700)$  , $JD.com(JD)$ and $MEITUAN-W(03690)$   may see some respite, especially as their stock prices are trading near multi-year lows with improved risk/reward ratios.

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