Foreign Investors Boosted China Stock Holdings by 81% in 2017

  • Overseas investors also increased bonds purchases by 41%
  • Growth pace will likely hold up due to strong equities: ABCI

Foreign investors piled into Chinese equities and bonds last year as greater access and a strengthening yuan offset lackluster markets.

Overseas holdings of the nation’s stocks rose 81 percent to 1.17 trillion yuan ($183 billion), the biggest increase since the People’s Bank of China started publishing the data in 2014. That’s equivalent to 2.3 percent of the nation’s market capitalization, according to data released Wednesday. Global buyers boosted their positions of bonds by 41 percent to 1.2 trillion yuan, or 1.6 percent of the total, the data showed.

Foreign investors stepped up purchases even as the benchmark Shanghai Composite Index lagged global benchmarks with a 6.6 percent gain, while the bond market slumped the most since 2013. China opened a second stock trading channel with Hong Kong at the end of 2016 and a debt trading link in July, while the yuan rallied the most in nine years.

Read more about how foreigners are growing more interested in Chinese debt.

"The growth pace is likely to hold up in 2018, as the domestic stock market is likely to see further gains," said Yao Shaohua, an economist at ABCI Securities Co. in Hong Kong. "The increase in foreign holdings can also help offset capital outflow pressures."

— With assistance by Tian Chen, Yinan Zhao, and Jeanny Yu

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE