Overseas funds lift stocks past 2,900

Source: Xinhua | 2019-05-29

China stocks extended rally yesterday to close above 2,900 points, boosted by inflows of overseas capital before the first step of MSCI’s inclusion of Chinese A-shares took effect.

The Shanghai Composite Index advanced 0.61 percent to end at 2,909.91 points. The smaller Shenzhen Component Index also rose 0.61 percent to 9,035.69 points and the blue-chip CSI300 index was up 0.96 percent to 3,672.26 points.

Turnover on the two bourses expanded sharply to add up to 499.53 billion yuan (US$72.27 billion), compared with 452.67 billion yuan in the previous session. Overseas investors poured into A-shares, with the net capital inflow via the Stock Connect linking Hong Kong and the Chinese mainland hitting 11 billion yuan during the day and reaching nearly 7.5 billion yuan at the close.

The first phase of MSCI’s increase of Chinese A-shares weighting into its global indexes officially went into effect after the bell yesterday.

“We estimate that the increase of the China A-share inclusion factor from 5 percent to 20 percent by MSCI would lead to a US$70 billion fund inflow to the A-share market this year. We expect MSCI to further increase the weight of A-shares if China continues to promote the further opening and development of the market,” said Thomas Fang, head of China Equities at UBS.