KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
From Aversion to Attraction
After years of regulatory crackdowns and property market turmoil, global investors are returning to China. A world-beating US$2.7 trillion equity rally and advances in high-tech industries have made Chinese assets hard to ignore. Goldman Sachs noted hedge funds were the most active in onshore equities in recent years, reversing the “uninvestable” label that haunted China since 2021.
Rising Inflows Across Asset Classes
Foreigners increased holdings of stocks, bonds, loans, and deposits simultaneously in 1H 2025 — the first such occurrence since 2021.
Net inflows through June already surpassed 2024’s total by 60%, according to PBOC data.
August also saw continued net foreign purchases of onshore stocks and bonds, reinforcing momentum.
In total, global funds remain underweight by 1.3 percentage points, signaling further room for exposure.
Tech and AI Drive Sentiment
China’s tech sector is the key catalyst:
Alibaba rolled out its latest AI models.
Cambricon Technologies reported chip breakthroughs.
Clean tech and AI are seen as attractively priced growth areas.
The ChiNext Index rallied nearly 50% this quarter, while the CSI 300 Index gained 16% to reach a three-year high.
Global Conditions Boost China’s Appeal
Several macro factors are working in Beijing’s favor:
U.S. trade tensions under Trump push investors to diversify.
Fed rate cuts and a ballooning U.S. deficit weaken dollar assets.
China’s relatively low inflation and policy support bolster fundamentals.
As Invesco’s Chang Hwan Sung noted, markets with compelling valuation and light foreign positioning — like China — stand to benefit most.
Beyond Equities: Bond Market Revival
Chinese tech firms sold a record amount of dim sum bonds this year, with strong participation from Middle East and European investors.
Tencent’s bond sale drew broad demand, while Alibaba’s convertible issuance was multiple times oversubscribed.
Pimco’s Stephen Chang said client conversations have shifted from “how to de-risk” to “what are the opportunities” in China.
Even as foreigners trimmed holdings of government bonds in August, the pace of outflows slowed sharply. PBOC officials highlighted that yuan bond real yields remain attractive, supporting renewed interest.
Yuan Strengthens as Confidence Returns
The yuan climbed to 7.1 per dollar, its strongest since last November, aided by foreign inflows. Analysts see broader support if capital continues to flow into both equity and fixed-income markets.
Risks Remain, but Perceptions Shift
Skepticism lingers, especially among U.S. pension funds restricted by political directives to avoid China. Authorities in Beijing also remain wary of overheating rallies. Still, confidence is steadily rebuilding.
“China is not uninvestable,” said UBS’s Thomas Fang, pointing to the mismatch between China’s economic weight and its still minimal global portfolio allocations.
Takeaway: With fundamentals improving, inflows accelerating, and tech driving growth, global investors are increasingly looking at China not as a risk — but as a long-term opportunity.
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