Comparable to the DeepSeek moment! China technology ETFs in the US attract capital for six consecutive weeks, making China the top choice market for stock investment.
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According to data compiled by Bloomberg, recently capital inflows into emerging market ETFs have accelerated, with China once again topping the list for attracting funds.
As of the week ending September 19, U.S.-traded Chinese tech ETF KraneShares CSI China Internet ETF (KWEB) recorded capital inflows for the sixth consecutive week, marking the longest streak since the DeepSeek moment in February this year.
KWEB received $142 million in inflows. Over this six-week period, the ETF recorded a total inflow of $599 million. Although this is comparable to the DeepSeek moment at the start of the year, the total inflow over the latest six weeks is less than one third of that during the six-week period in January and February.
The above Bloomberg data is consistent with HSBC's latest survey. On the same day, according to HSBC's Emerging Markets survey, investor optimism has increased, with China becoming the top choice for equity investment.
The HSBC report pointed out that investors were already optimistic about the prospects of emerging market assets, and the latest survey results show this optimism has strengthened:
The proportion of respondents bullish on emerging market prospects for the next three months rose from 44% in June to the latest 62%, the second highest since HSBC began conducting this survey.
The proportion of respondents bearish on emerging market prospects for the next three months dropped from 14% in June to the latest 7%.
Net sentiment among respondents, that is, the bullish proportion minus the bearish proportion, soared from 30% to 55%, the second highest on record for this survey.
The HSBC survey shows some clear shifts in regional preferences. Latin America remains a popular region, with respondents optimistic about its fixed income and foreign exchange prospects. In the stock market, respondents are more optimistic about the outlook for Asia.
It is widely believed that emerging market equities will rise in the next three months. They also expect the performance of emerging market stocks to outperform developed markets, with China becoming the preferred destination for equity investment.
Compared to June, overall net sentiment towards emerging market currencies has cooled somewhat, which analysts attribute to the mostly flat performance of the U.S. dollar during the survey period. Investors now prefer local currency bonds over foreign currency bonds, although the popularity of the latter has risen significantly. In addition, nearly a quarter of respondents now view both local and foreign currency bonds as the top fixed income asset classes.
HSBC's latest survey was conducted from August 4 to September 15, including 100 investors from 100 institutions, collectively managing $423 billion in emerging market assets.
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