Dividends and Signs suggest foreign investors are warming up to Chinese equities again

When COVID happened, China adopted a policy of shutdown of the area in which cases were discovered. The shutdown affected normal life including the economic engine of the Chinese economy. China’s President has been losing the reigns of the shutdown and allowing people to move freely again. The freedom was opened up the economy and this has been translated on to the stock market.

In an article from Reuters, foreign investors are slowly coming back into the Chinese stock markets. MSCI China has gained 50% since November while the Hong Kong’s Hang Seng Index is up 47% against roughly 6% for the world’s stock exchange.

Analysts attribute most of the gains to short-covering and fast money, leaving the slower institutional money to drive the rally further.

Ken Peng, head of Asia’s investment strategy at Citi Global Wealth expects greater inflows into the Chinese markets and is bullish on Chinese equities.

JP Morgan Asset Management is in the process of raising allocations to Chinese equities for its institutional clients.

Linking to dividend paying stocks, as a dividend buyer you will miss some big rallies because the emphasis on buying is the long-term payments and capital appreciation. There are speculators which help ensure liquidity in the market and they have up years and down years, because there is no consistency with speculation. The idea is then do your homework and have patience the reason you bought comes forthwith. In this fashion you try to avoid the number one rule, try not to lose money.

There are more questions than answers, till the next time – to raising questions.


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