Beijing’s stimulus sparks record hedge fund interest in Chinese stocks

Global hedge funds significantly increased their investments in Chinese equities backed by Beijing’s larger-than-expected stimulus measures, according to a report from Goldman Sachs on Wednesday.

Hedge funds had their highest weekly buying of Chinese assets ever in the week of Sept. 23-27, showing a “sharply” accelerated allocation to China. Purchases reached a new high since Goldman Sachs began tracking data in 2016.

The bank’s prime brokerage team said that the inflow was driven by long positions, especially in single stocks, with a focus on consumer, industrials, financials, and information technology. Hedge funds marginally sold energy sector stocks.

Chinese stocks surged and recorded their best weekly gain in over a decade following the government’s announcement of a stimulus package, which included interest rate cuts and a $114 billion fund to boost share prices.

Attribution: Reuters

Subediting: Y.Yasser