BEIJING, China – It is the Chinese tech sector’s time to shine as investors continue to buy in. The country’s stock market also posted gains for the third straight week while the rest of Asia remains quiet.
Foreign investors are still purchasing Chinese stocks, with the buying expected to increase as Beijing and Washington appear ready to find a resolution to their ongoing trade issues. Traders have been consistent in securing stocks from the country’s A-share market, and the buying actions these past 26 consecutive sessions have resulted in the tech sector enjoying new highs.
It is a welcome outcome as China’s tech industry was under immense selling pressure in 2018. Fortunately, the superpower’s steps to bolster its tech capacities and the launch of the STAR Market back in July was more than enough to capture the interest of foreign investors.
So far, investors have spent over $26.99 million, or 190 billion yuan, buying shares in the tech-centric Shenzhen Stock Exchange this year. It’s a big step up from the 113 billion yuan spent in 2018.
Stocks in Will Semiconductor, a semiconductor company based in Shanghai, rose by more than 400% this year. Beijing software firm Glodon also experience record-high valuations this year.
Foreign investors are also estimated to own over a 5% stake in dozens of Chinese tech companies. Analysts have noted that it’s the outside investors who are the main players behind the boost in the country’s tech industry while domestic investors are less willing to invest in the technology industry.
Meanwhile, the Asian stock market was quiet as the region remained unconcerned about Trump’s impeachment.
The Nikkei 225 of Japan slipped 0.2% to 23,809.33. Australia’s S&P ASX 200 also dropped 0.2% to 6,821 while the Hang Seng Index inched up 0.1% to 29,538. Meanwhile, the KOSPI barely moved.
Shares in the Philippine stock market plummeted over 2%, dropping to its lowest levels since the year started. Malaysian equities also suffered losses while stocks in Indonesia and Thailand also dropped. But Singapore stocks mustered minimal gains.
Analysts are saying that the mixed showing in the region was due to investors easing off from making any big moves ahead of the holiday season as well as the positive developments in the partial trade agreement between China and the United States.
Stock futures in the US were also mixed on Friday morning. Dow futures dropped 17 points and indicated it would open with a two-point increase, Meanwhile, futures on Nasdaq and the S&P were heading in the opposite direction.