A comprehensive analysis highlighting the reasonable valuation of Chinese stocks and widespread investor optimism has gained significant attention across official government social media channels this afternoon and evening.
The widely circulated article, sourced from China News Service in Shanghai on September 4th, presents multiple perspectives from foreign financial institutions expressing positive views on Chinese equity markets.
Swiss bank Pico Partners strategist Deng Qizhi analyzed that A-shares have risen 25% since their April lows, while H-shares have gained over 35% since January. However, compared to historical performance in Chinese capital markets, these figures remain moderate. The Hang Seng Index and CSI 300 Index trade at forward price-to-earnings ratios of 11x and 14x respectively, significantly below previous peaks.
Multiple onshore liquidity indicators show market sentiment has notably improved, though not yet reaching 2015 levels. Recent domestic public and private hedge fund fundraising has expanded, but subscription volumes remain below historical averages, suggesting these funds have additional capacity to increase A-share allocations.
Based on this analysis, Deng concluded that current Chinese stock market gains align with historical patterns, valuations remain reasonable, and liquidity indicators show increased market activity without overheating, suggesting further upside potential.
UBS Securities China equity strategist Meng Lei recently engaged with dozens of investors regarding the liquidity-driven A-share "bull market," including public funds, private funds, insurance capital, overseas hedge funds, long-term funds, and sovereign funds. These investors universally expressed optimistic views on the A-share market.
Meng noted: "Overseas capital showed net inflows into A-shares during the first half of 2025, with foreign investors holding 3.07 trillion yuan in A-shares by the end of June 2025. Looking ahead, as China's economy continues recovering and innovation helps Chinese companies deliver earnings growth, we believe overseas investors have substantial room to increase A-share positions."
Beyond mainland Chinese equities, Fidelity Fund maintains an equally positive outlook on Hong Kong stocks. Fidelity Fund Manager Zhang Xiaomu indicated that globally, China represents a rare economy combining stable domestic conditions with significant strategic depth, demonstrating strong economic and social resilience amid increasingly complex geopolitical environments.
The Hong Kong stock market serves as the listing venue for numerous excellent Chinese companies with higher international integration. Therefore, when international capital seeks "rebalancing," the Hong Kong market may become their preferred destination.
"As China's mainland economic development continues advancing, residents' demand for global wealth allocation is gradually emerging. The Hong Kong stock market, as the frontier where Chinese industries and global capital deeply integrate, represents the preferred destination for controlled international investment by mainland Chinese capital," Zhang explained. "We particularly favor new productive force enterprises in the Hong Kong market. Although most remain in high-investment periods for technological innovation, these companies show exceptional performance supported by policy dividends."
This viral article transmission signals positive momentum, providing important psychological support for next week's stock market.
The Shanghai Composite Index has accelerated upward since late June. However, sharp declines occurred on September 3rd and 4th, with the index closing down over 40 points both days. This concerned many new retail investors, raising fears of a repeat of the October 8th peak last year.
Today (September 5th), the market ended its correction with the Shanghai Composite rebounding 46.63 points, restoring some market confidence. The post-market coordination of government department social media accounts sharing the same article sends a clear message.
Tonight brought additional positive news: the China Securities Regulatory Commission revised and published "Management Regulations on Sales Fees for Publicly Offered Securities Investment Funds," specifying reduced rates for public fund subscription fees, purchase fees, and sales service fees, along with optimized redemption arrangements.
The new regulations lower equity fund subscription and purchase fee caps from 1.2% and 1.5% to 0.8%; reduce mixed fund subscription and purchase fee caps from 1.2% and 1.5% to 0.5%; and decrease bond fund subscription and purchase fee caps from 0.6% and 0.8% to 0.3%.
This means that since July 2023, public fund fee reforms across three phases have cumulatively saved investors over 50 billion yuan annually. This clearly encourages continued deposit migration and active market participation through fund purchases.
Tonight also brought significant news from the United States: The Bureau of Labor Statistics reported that US August employment growth slowed more than expected, with previous months' data revised downward again, indicating significant labor market cooling. US August seasonally adjusted non-farm payrolls recorded 22,000 additions, far below market expectations of 75,000, with the previous value revised from 73,000 to 79,000.
This virtually confirms Federal Reserve rate cuts in September. Following the data release, international gold prices jumped to historic highs. The Fed's return to rate cuts significantly increases China's rate cut probability. China's LPR could potentially decrease as early as September 22nd, reducing mortgage rates accordingly.
US rate cuts and expanded Chinese monetary policy space create substantial benefits for A-shares, Hong Kong stocks, and real estate markets. How will Monday's market respond? Let's wait and see!