China equity funds draw largest weekly inflows since 2015 -BofA By Reuters

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<span>© Reuters. Investors are seen behind screens displaying stock information at a brokerage house in Fuyang, Anhui province, China February 24, 2022. China Daily via REUTERS</span><br />
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<p>By Alun John</p>
<p>LONDON (Reuters) – Investors poured almost $12 billion into Chinese equity funds in the week to Wednesday in the largest inflow since 2015 and the second largest ever, a BofA Global Research report showed on Friday – a positive sign for battered Chinese stocks.</p>
<p>Hong Kong’s is up nearly 5% this week, its best performance since last July, and onshore blue chips have risen 1.5% as Beijing steps up efforts to restore confidence in the world’s second economy. [.SS] </p>
<p>China’s central bank said earlier this week it would cut the amount of cash that banks must hold as reserves. In addition Beijing has announced steps to ease a liquidity crunch facing troubled property developers, while media have reported a 2 trillion yuan ($278.53 billion) rescue package to buy stocks. </p>
<p>Those come as onshore Chinese blue chips trade around their lowest in around five years and the Hong Kong benchmark at its lowest in over a year due to investor fears about the Chinese economy, particularly its beleaguered property sector. </p>
<p>That collapse in shares merits a wager on an eventual rebound and perhaps a new approach to investing in the market, some investors say. </p>
<p>A sharp fall in Chinese property stocks made China “the world’s most enticing contrarian long ‘trade'”, BofA analysts said, noting: “No one believes it’s an ‘investment'”. </p>
<p>Elsewhere, equity funds recorded investments of $17.6 billion, and bond flows of $14.2 billion in the week to Wednesday, BofA said, citing data from fund flows and asset allocation data provider EPFR. </p>
<p>U.S. stocks meanwhile were surging to new highs driven by tech shares as an AI “baby bubble” grows, the BofA note said.</p>
<p>According to its note, tech stocks saw a third straight weekly inflow of $2.8 billion, the largest since last August.</p>
<p>Tech and technology-related sectors drove the ‘s 24% gain in 2023, and many of those stocks are off to a strong start again this year.</p>
<p>Emerging market (EM) equities registered a record weekly inflow of $12.1 billion, and EM debt markets a third week of outflows, BofA added.</p>
<p>It said that bond markets have recorded inflows for the past five weeks, with inflows worth almost $5 billion in the past two weeks into government bonds. </p>
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