Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
If China equities continue to outperform the rest of the world trend it should spur more inflows into local equities. The first chart plots the ratio of China equities to global equities (MSCI basis) against the rolling 1 month sum of northbound flows via the stock connect. Yesterday saw the largest daily inflow since mid November last year.
- China equities are generally on a positive footing again today, which has helped drive a further 4.6bn yuan of inflows so far via the stock connect. This follows 12.75bn yuan from yesterday.
- Sentiment has been buoyed further today by Bloomberg reports that China will wind back restrictions on the property sector (easing the so-called three red lines property rules).
Fig 1: China/World Equity Ratio & Northbound Equity Flows
Source: MNI - Market News/Bloomberg
- China growth expectations have stabilized as per consensus expectations for 2023, taken from Bloomberg, and the J.P. Morgan growth forecast revision index for China, see the second chart below.
- If growth expectations turn higher, or least remain stable, it could drive the China outperformance theme further, particularly with growth forecasts for major developed economies generally sitting much lower for 2023 compared to 2022.
- The CNH has been following the relative equity trend (between China & the rest of the world) fairly closely since September last year, as we highlighted this morning (see this link).
Fig 2: J.P. Morgan China Growth FRI & Consensus 2023 China GDP Expectations
Source: J.P. Morgan/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok