InnovestX upbeat on Chinese equities

China's economic recovery, greater market openness, and high corporate spending on R&D across industries are the main reasons investors should pay attention to Chinese equities in order to capitalise on ample growth potential in the mainland, says InnovestX Securities.

- NAREERAT WIRIYAPONG

Rhatsarun Tanapaisankit, head of investment strategy and trading product specialist at InnovestX, said China's economy has become increasingly vital to the global economy since its acceptance into the World Trade Organization in 2001, with China's share of global GDP rising from just 4% to 17% at present.

Meanwhile, the US's share of global GDP has declined from roughly 30% to 26% over the same period.

Foreign investment in Chinese stocks remains low. According to MSCI ACWI, a major global equity index that tracks large and medium-capitalisation stocks across 23 developed and 24 emerging market countries, only 3.19% of its investment is in Chinese stocks, with 65% in US stocks.

“This indicates investors can still significantly increase their investment in Chinese stocks,” said Mr Rhatsarun.