Chinese equities see largest monthly net buying in Aug since Sept 2024: report

A latest report by Goldman Sachs showed that in August, Chinese equities, combining onshore and offshore markets, experienced the largest monthly net buying since September 2024. Gross allocation to China in the GS Prime book rose to a two-year high, indicating significant capital inflows and heightened institutional interest in Chinese stocks.

According to Hedge Fund flows statistics from Prime Service, Asian equities saw risk on flows for a fourth consecutive month. A-share margin financing balances have surged to 2.3 trillion yuan, the highest since 2015 in absolute, said the report.

China's A-share market has exhibited a notable rebound recently, driven by both policy measures and capital inflows. According to data, from September 24, 2024, to September 10, 2025, the Shanghai Composite Index rose by 33.15 percent, while the Shenzhen Component Index and the ChiNext Index performed even more strongly, climbing 48.87 percent and 79.79 percent, respectively.

Analysts noted that this performance not only reflects heightened market activity but also signals a significant restoration of investor confidence.

Foreign financial institutions have recently published reports and analyses expressing broadly positive views on the Chinese market. The Global Market Outlook by Standard Chartered published on August 22, 2025, showed that they remained Overweight on China equities.

Goldman Sachs on May 15 said to maintain its overweight rating on Chinese equities - a clear buy signal with double-digit growth potential. Nomura also upgraded its rating on Chinese stocks to "tactical overweight" from "neutral" on May 13, signaling a short to mid-term bullish outlook, according to a report by financial news weibiste yicaiglobal.com.

In addition, Ratings agency S&P Global on Thursday affirmed China's long-term credit rating at A+ and said its strong fiscal stimulus will keep economic growth resilient amid headwinds from the property sector and tariff pressures, adding that the outlook on China's rating is "stable," said a Reuters report on August 7.

Data released by the State Administration of Foreign Exchange at a July 22 press briefing showed that foreign holdings of onshore yuan bonds have surpassed $600 billion, marking a historically high level.

In the first half of 2025, foreign investors also increased their net holdings of domestic stocks and funds by $10.1 billion. Notably, in May and June alone, net purchases surged to $18.8 billion, reflecting continued foreign confidence in China's financial markets.

A series of data indicate that, so far this year, foreign investment in yuan assets has remained generally stable. Foreign holdings of yuan-denominated bonds have increased, and recent foreign investment in domestic equities has been broadly positive, signaling a growing global willingness to allocate capital to yuan assets, the Xinhua News Agency reported.