China attracts investors back to equities

ChopsticksA $600 million (€467 million) injection of cash into China equity funds in the final week of October suggests confidence in the country’s equity markets has returned after a year of lower growth. China equity funds were also the only single-country funds to gain interest from investors, says EPFR Global, which tracks a range of funds. The data firm says emerging markets also gained on the back of China. “Further evidence the Chinese economy has bottomed out helped sustain the recent appetite investors have shown for emerging markets exposure. Emerging markets equity and bond funds extended their current inflow streaks to eight and 21 consecutive weeks respectively,” EPFR says. Keith Wade, chief economist at Schroders, says: "This recent improvement in Chinese data and global sentiment, as well as a halt to the euro’s slide, is likely to be the reason that the portfolio outflows tentatively appear to have stabilised. “We expect the reduced fear of a hard landing to drive investors into the Chinese market in search of more attractive growth prospects, reversing the capital outflows we have seen.” ©2012 funds europe

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