These 3 reasons Could Fuel the Continuation of the Chinese Stock Market Rally

Post-COVID, foreign investors significantly reduced Foreign Direct Investment (FDI) in China as shown in the chart below. However, as China has launched it's stimulus package to save its economy, these investors now face a "fear of missing out" (FOMO) on potential opportunities in the stock market and are returning as seen in the last week. But this will take time.

The Great Chinese Rally: A Buying Opportunity or Time to Exit?

What a remarkable week it has been. After my previous post(here) on taking a look at the Chinese stocks again, it rallied with great momentum for more than a week. I dont know it will rallied with such a momentum, if I knew, I would have thrown in the kitchen sink as well. 

As I mentioned earlier, these patterns tend to repeat: once the value becomes apparent, investors begin to take notice. Now, with the recent rally, many are questioning whether they should sell their positions—many of which have finally turned positive—or whether it’s a good time to enter the market for those looking to buy.

China’s New Stimulus: Is Now Time to look again at Its Stock Market?

China just introduced a new round of stimulus measures aimed at propping up its slowing economy, which has been hit by sluggish consumer demand, weak property markets, and external pressures like trade tensions. Many has been sceptical about investing in the Chinese stock market, as they still remember the regulatory crackdown beginning in late 2020, when authorities took sweeping actions that reshaped the landscape for some of the country’s largest and most prominent tech companies. Many have spoken on these risks, regulatory uncertainty and governance issues preventing them from investing into the Chinese stock market.