Chinese capital market shows signs of improvement, sees increased interest in fund products

The Chinese capital market has shown signs of improvement, with an increase in active trading sentiment in fund products and a return of foreign inflows. Experts attribute the positive developments to recent regulatory efforts aimed at protecting investor rights and strengthening market regulation, adding that these measures are paving the way for long-term, high-quality growth in China's capital market.

Chinese real estate investment trusts (REITs) are experiencing a resurgence in market sentiment, with multiple cases of "single-day sellouts."

A clean-energy REIT product managed by Harvest Fund announced the early completion of its fundraising due to strong investor demand on Tuesday. Last week, an expressway REIT product under E Fund Management, ended the subscription earlier than the originally planned date due to strong demand from investors.

The Anxin Changxin Enhanced Bond Fund, issued by Essence Fund, was established on Tuesday with a net subscription amount of about 8 billion yuan ($1.12 billion) and had more than 15,000 total subscribers during the fundraising period from February 26 to March 6, making it the largest fund of the year, the China Securities Journal reported on Tuesday.

Foreign money is trickling back in. An analysis by UBS Securities on Thursday said that the firm maintains a positive stance on A shares, with an optimistic and proactive attitude. With regulatory intervention and the overall improvement in liquidity, it expects the short-term rebound in the A-share market to continue.

On March 3, Goldman Sachs released a report stating that governance reforms focusing on valuation and shareholder returns will attract foreign capital, while maintaining a high rating for Chinese A shares. Morgan Stanley's latest report on March 5 indicated that global funds are returning to the Chinese stock market.

Recent positive changes reflect investors' high confidence in the market and its prospect of healthy development, experts said.

Following the eight-day Spring Festival holidays, the market has continuously risen, with the Shanghai Composite Index standing above the 3,000-point mark as of Tuesday's closing.

Several sectors have started to quietly rebound from their lows, and the market's profit-making potential is becoming more evident, Yang Delong, chief economist at the Shenzhen-based First Seafront Fund, told the Global Times on Tuesday.

The A-share main indexes experienced some fluctuations in Tuesday's trading. By the closing bell, the Shenzhen Component Index was up 0.51 percent and the ChiNext Index had increased 0.83 percent. A total of 3,700 stocks saw gains.

Total trading volume reached 1.15 trillion yuan, marking the second consecutive day it exceeded 1 trillion yuan. Northbound funds net buying hit 4.244 billion yuan.

Experts attributed the confidence to a steady stream of policy support by Chinese securities regulators to stabilize the market.

During a press conference on the sidelines of the just-concluded two sessions, Wu Qing, head of the China Securities Regulatory Commission (CSRC), emphasized the importance of prioritizing investors, combating financial fraud, and encouraging listed companies to engage in cash dividends and buybacks.

These measures are beneficial for boosting investors' confidence and the high-quality development of the Chinese capital market, Yang said.

The CSRC's focus on improving the quality of listed companies, promoting long-term investment concepts, enhancing basic systems, establishing more effective market regulation mechanisms, encouraging higher quality services, and implementing stricter regulatory enforcement all show the latest regulatory philosophy, Tao Chuan, an economist with Suzhou-based Soochow Securities, told the Global Times on Tuesday.

In particular, the CSRC has vowed to "take action decisively" when the market experiences "irrational and violent fluctuation, liquidity dries up, there is market panic or a severe lack of confidence, and other extreme situations," which helps to rebuild investor confidence in the capital market, Tao said.