(May 21): Foreign investors returned to Chinese stocks in April, signalling renewed appetite for the market after an initial selloff driven by the Iran war.
Estimated net inflows into mainland equities hit roughly 200 billion yuan (US$29 billion) last month, the most since January, Bloomberg calculations show.
The estimate is based on China’s aggregate cross-border securities investment balance — an official dataset that tracks flows into and out of the country’s stocks and bonds. Bloomberg then strips out major components that can be observed separately, including mainland investors’ buying and selling of assets through trading links, net flows into foreign-currency bonds by Chinese financial institutions, and changes in overseas investors’ holdings of onshore bonds.
What remains is a proxy for foreign flows into mainland-listed equities.
This offers investors a way to gauge overseas appetite for Chinese stocks at a time when Beijing has limited access to direct flows data. Authorities stopped publishing regular or detailed data on so-called northbound flows — overseas investors buying mainland shares through trading links — in mid-2024, leaving investors with only limited quarterly disclosure on holdings in individual stocks.
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The Bloomberg estimate accounts for most major sources of cross-border capital flows, and it does not strip out flows from quota-based schemes such as the Qualified Domestic Institutional Investor and Qualified Foreign Institutional Investor programmes, because there is no timely disclosure of quota usage.
The inflows in April came amid a broader tech rally, as investors focused on AI-driven productivity gains and looked past disruptions caused by the Middle East conflict. The benchmark CSI 300 Index climbed 8% in April and is up another 0.9% this month.
Uploaded by Liza Shireen Koshy
