(Dec 13): Investors poured money into Chinese stocks over the past week again as the country’s leaders vowed to boost growth with more stimulus measures, according to Bank of America Corp strategists.

About US$5.6 billion (RM24.9 billion) was allocated to Chinese equity funds in the week through Wednesday, the biggest inflow in nine weeks, strategists led by Michael Hartnett said, citing EPFR Global data.

China’s Politburo this week pledged to embrace a “moderately loose” stance on monetary policies — its first such shift in 14 years — while promising to dial up fiscal measures for next year. The MSCI China Index jumped over 3% on Monday, but has pared gains since after a closely watched policy statement failed to offer the specifics of a fiscal stimulus for which traders had hoped.

Still, Hartnett said there’s room for Chinese stocks to “outperform more,” if investors get “too fearful” of President-elect Donald Trump’s tariff agenda. He also sees an entry point for non-US shares in the first quarter of next year.

With investors already heavily positioning for higher US dollar and treasury yields, there’s a risk of “overshoot” early next year, the strategist said. He sees bonds, gold and international stocks attractive in a scenario where persistent inflation forces the Federal Reserve to turn more hawkish.

Chinese equities are no stranger to wild swings in money flows. Investors poured a record amount into Chinese stock funds in early October after authorities rolled out a slew of measures to support the market. But hedge funds quickly reversed the trade in the weeks that followed, and a 10 trillion yuan programme to tackle the local government debt crisis wasn’t enough to impress traders.

The MSCI China Index soared almost 40% from a September low to an October high, but has pulled back close to 15% from its peak. It’s up 16% year-to-date, set to underperform the S&P 500 for a fourth year.

Uploaded by Magessan Varatharaja